California Pizza Kitchen Files Chapter 11, Will Close Some Restaurants
LOS ANGELES (CNN) -- California Pizza Kitchen is the latest fast casual chain to file for bankruptcy as the pandemic and its debt burden hampers its operations.
The 35-year-old Los Angeles-based pizza chain filed for Chapter 11 Thursday, explaining that the process will help it "reduce its long-term debt load, and quickly emerge from bankruptcy as a much stronger company." It warned that it will close unprofitable locations, but didn't say how many of its 200 global restaurants will be affected.
The temporary closure of indoor dining has also been brutal for the company, because on-premise dining makes up 80% of its sales, the company said in a filing. Revenues are currently down 40% compared to the same time a year ago, it said.
Restaurants, in particular casual chains like CPK, have been struggling in recent few months. The closure of in-person dining in some states and the rough economics of using third-party apps like Uber Eats or DoorDash -- which increase restaurants' costs and encourage diners to eat at home -- is a losing proposition for many.
In recent months, Chuck E. Cheese's parent company, Italian chain Vapiano, Le Pain Quotidien's US unit and FoodFirst Global Restaurants, which owns Bravo and Brio, have all filed for bankruptcy. Even large franchisees, like NPC International which operates thousands of Pizza Hut and Wendy's locations, are currently navigating the Chapter 11 process.
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