The 35-year-old 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 unprecedented impact of Covid-19 on our operations certainly created additional challenges, but this agreement from our lenders demonstrates their commitment to CPK's viability as an ongoing business," CEO Jim Hyatt said in a release.
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CPK secured nearly $47 million in new financing to ensure operations continue normally. It has around $13 million cash on hand and hasn't paid rent for the past several months on a majority of its locations.
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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