CiCi’s Holdings Inc., parent company of the chain pizza buffet-style restaurant, filed for Chapter 11 bankruptcy Tuesday, due to effects of the COVID-19 pandemic.
Irving-based CiCi’s filed for bankruptcy after more than a decade of gradual decline, due to its inability to keep up with the delivery strategy many other restaurant brands utilized because of its all-you-can-eat model, it said in court records.
CiCi’s broke the terms of a credit agreement and couldn’t make up for its losses in 2020, which led to the voluntary bankruptcy, records show. In-store dining has generally made up more than 85 percent of sales, the Chapter 11 filing said.
CiCi’s will sell ownership to its lender, D&G Investors, LLC in an expedited process after D&G acquired $81.6 million in debt from CiCi’s previous lenders. The company intends to exit bankruptcy March 3, pending court approval, records show — quicker than a typical Chapter 11 reorganization process. The pizza brand still owes just over $81.6 million in a revolving facility and term loan facility.
Founded in 1985 in Plano as an all-you-can-eat pizza stop, the company operates 11 pizza buffets and franchises to 307 more. CiCi’s listed as much as $50 million of assets and $100 million in liabilities in its filing to the U.S. Bankruptcy Court for the Northern District of Texas.
Over the last 12 years, CiCi’s has been declining in size, since it peaked at 650 restaurants in 33 states by 2009, most of which were franchised, the filing said. It began to purposely move toward a heavier franchise-owned model and by the beginning of 2020, CiCi’s was down to 395 locations across 25 states, 96 percent of which were franchises.
CiCi’s will continue to operate under Chapter 11, and its franchise locations are not part of the filing.
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