MOD Pizza, renowned country wide for its unique take on quick and yummy pizzas. Originally they opened in Seattle in 2008, by the end of 2023 they would have more than 560 restaurants nationwide. Despite this, MOD Pizza has recently shut its doors on 27 of its locations around the United States without any kind of warning, not even to its displaced employees.
MOD Pizza’s History
When people think of fast-food pizza , they typically think of Domino’s. Pizza Hut, or even Papa Johns. These popular chains certainly have a lot to offer, such as delivery services, affordable pizzas, and beloved menu items.
But MOD Pizza offers something a little different then fast-food pizza does. When it first opened its restaurant in Seattle, Washington, in 2008 it advertised made-to-order pizzas with fresh ingredients. Like Subway or Chipotle, customers were offered the opportunity to customize their orders and walk out with a freshly made pizza in a short amount of time.
Why 27 Closures?
It was just recently announced that MOD Pizza was closing 27 of its 560 locations just this last month, and oddly, no one understands the reason why.
Financially the company has been doing really well, with a reported revenue of $398 million in 2023. Which is actually an increase from the year prior, showing that the company is actually improving its overall sales.
Successful Business Model
The business model of MOD has proven to be a successful one, and only in a few years since opening its business. MOD Pizza started showing up in locations all over the country, and by December of 2023 there were 560 locations in the United States and Canada.
It’s important to understand that MOD never really rivaled the big names, but it certainly made enough money in its unique market to be considered a top contender for fast food pizza.
No Comment
No one from MOD Pizza has given public comment on the reasons behind the shocking closures. While it is possible that one is coming, for now, their employees, customers, and everyone else are in the dark.
Some have taken upon themselves to speculate, assuming that five of the recent closures are related to the fact the locations were in California.
California’s Newest Legislation
Gavin Newsom, the Governor of California, recently passed a law that went into effect in April of 2024, the legislation upped the minimum wage for fast food workers, increasing their pay from $16 to $20 per hour.
This has ignited serious debate nationwide. Many contend that it is a positive step in the right direction, however others say it is going to cause an uptick in closures and layoffs.
California’s Minimum Wage
California is home to more MOD restaurants than any other state, Except for Washington state, where MOD first opened.
And because there are so many locations in California, 50 to be exact, many say that the state’s recent increase in minimum wage is likely the reason behind the state’s closures of MOD Pizza.
Significant Increase In Labor Costs
The new legislation will undoubtedly increase labor costs for dozens of fast food chains this year.
To mitigate this, some companies, like Chipotle and McDonalds have reported they will be raising their prices.
MOD Pizza Employee
In an interview from FOX26News a MOD Pizza employee who recently lost their job explained, “I do have a feeling it had to do with the $20 an hour increase, seeing as they knew it was coming.”
The employee, who chose to remain anonymous, is of course, disappointed. Their expectations were to get a raise, and instead they were letgo. They said,“I mean, nobody is going to turn down a raise, but at the end of the day, with repercussions like this, was it worth it?”
Is $4 More Worth Risking Increased Unemployment?
The situation with MOD Pizza is sparking discussions on whether the new minimum wage in California is worth it.
Some, like the former MOD Pizza employee, believe that an extra $4 an hour just isn’t worth the cost increase for the businesses.
What’s Next?
It is important to keep in mind that until MOD Pizza makes an announcement as to why it is closing, everything being said is simply just a theory.
For now the future of MOD Pizza as a whole is anyone’s guess.
