Bankruptcy Protection for Sbarro

Submitted by Anonymous (not verified) on Mon, 03/10/2014 - 23:25
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By Mary Ann Gorman
Melville, New York-based, Sbarro, has filed for Chapter 11 bankruptcy for the second time in three years. The pizza chain has struggled with debt and competition in the marketplace.
In the Chapter 11 reorganization plan, Sbarro hopes to cut down its debt by over 80 percent. Sbarro also plans to close approximately 50 locations, on top of the 180 money-losing operations they have already shut down.
Although the bankruptcy will not affect the franchise owned 582 restaurants, Sbarro as a company has 799 restaurants and employs over 2,700 people.
Sbarro has seen a drop off in mall traffic, where many of their restaurants are located. Their business model has also been called into question.
A restaurant consultant said, "Sbarro has been struck with an outdated business model...Its biggest shortcoming is that is sells food that has been sitting out for a while, and more people want food made to order."