Pieology’s bankruptcy is the latest sign of problems in the fast-casual pizza sector. | Photo: Shutterstock.
A decade ago, a bunch of restaurant chains emerged with the simple idea of bringing the fast-casual, customizable business model to the pizza business.
Chains like MOD Pizza, Blaze Pizza, Pieology, PizzaRev, &pizza, Pie Five and others used superfast ovens and single-serve, customizable pies. The trend lured some of the most successful restaurant chains, too. Chipotle invested in Pizzeria Locale. Buffalo Wild Wings bought PizzaRev at just three locations.
We, too, thought it had some legs, given the apparent success of MOD and Blaze and the concept that pizzas could be had during lunchtime. And then the mainstream media picked up on this and wrote story after story about chains racing to become “the Chipotle of pizza.”
But nobody became the Chipotle of pizza. At best, these chains imitated Baja Fresh.
This week, another name from that era declared bankruptcy, when The Little Brown Box Pizza, parent to Pieology, sought Chapter 11 debt protection.
This has followed the declines and struggles of chains like Pie Five and PizzaRev. MOD Pizza, the largest of the fast-casual pizza chains, in 2021 was planning an initial public offering. But by last year it flirted with bankruptcy and was revealed to be what multiple sources described as a mess. It’s still closing locations.
In Pieology’s case, according to court filings, the company bought out 29 underperforming franchise locations from its largest franchisee. The company bought the locations by simply forgiving past-due royalties. The deal was predicated on the infusion of new investment cash into the company. That investment fell through.
Pieology went through with the purchase anyway “to avoid litigation risk and prevent the collapse of the franchisee’s operations.” The result instead was drained liquidity and ultimately a bankruptcy filing.
Sales among fast-casual pizza chains declined 5% last year, according to data from Restaurant Business sister company Technomic. Each of the five largest fast-casual pizza chains, including Pieology, saw sales declines.
The sector was undone by a handful of different factors. As much as anything, the pandemic hastened its decline, shifting consumers dramatically toward takeout and delivery, which harmed a group of businesses largely built on in-store sales.
And indeed, because these companies need to make their pizzas quickly, they use mostly thin- crust pizzas that don’t do well when consumed 20 minutes later.
Even before the pandemic there were chains experimenting with “larger, sharable” pizzas and drive-thrus that suggested the business model wasn’t working as well as many thought it would.
At the same time, many of these businesses had investment cash and grew almost recklessly, which was clearly the case with MOD.
Yet the pizza business as a whole has slowed. Quick-service pizza sales fell last year, too, declining less than 1%. Three of the six biggest fast-food pizza chains—Pizza Hut, Papa Johns and Papa Murphy’s—all saw sales declines in 2024.
All three continue to struggle this year. Yum Brands is trying to sell Pizza Hut, buyers backed out of acquiring Papa Johns and Papa Murphy’s parent MTY Food Group is on the market after its own stock weakness.
Maybe the U.S. consumer is just sick of pizza.
Restaurant Business Editor-in-Chief Jonathan Maze is a longtime industry journalist who writes about restaurant finance, mergers and acquisitions and the economy, with a particular focus on quick-service restaurants.
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