This Beloved Pizza Chain Is Filing for Bankruptcy and Shuttering Locations
Restaurants continue to feel the economic crunch and sadly, the list of well-established restaurant chains that have filed for bankruptcy since 2020 continues to grow.
In 2022 alone, we've seen the bankruptcy, and in some cases, the complete disappearance of several regional and national favorites. The popular New York City lunch destination Hale & Hearty abruptly closed the doors on its 16 remaining locations in July. We've also said goodbye to the final outpost of legendary favorite Howard Johnson's in June.
Most recently, Texas-based Hometown Burger said goodbye to its loyal fans in San Antonion, where it has been in operation since 2016. The chain simply posted a notice that it was shuttering all eight of its restaurants, seemingly overnight.
And now, a beloved Midwestern pizza chain joins this unfortunate bunch.
Dynamic Restaurant Holdings, the parent company of Happy Joe's, filed for bankruptcy earlier this month. Dynamic also operates the much smaller Florida-based pizza chain Tony Sacco's. As a result, company-owned locations will be closing across both brands.
Known for its signature thin-crust taco pizza, Happy Joe's boasted 42 locations across Iowa, Wisconsin, North Dakota, Illinois, Missouri, and Minnesota at the end of 2021. Tony Sacco's, meanwhile, operates four locations. A total of nine corporate-owned Happy Joe's and two Tony Sacco's restaurants were listed in the September 2 bankruptcy filing as being affected. Among that group, three Happy Joe's and both Tony Sacco's locations have already closed their doors.
But that doesn't mean the brands are disappearing altogether. The bankruptcy will not affect franchised locations of either chain, which accounts for 90% of Happy's Joe's restaurants and 50% of Tony Sacco's locations.
"I just don't want people to become scared," Happy Joe's CEO Tom Sacco told Local 4 News. "We're going to be here another fifty years. Trust me."
So what has led to this decidedly unhappy turn of events for Joe's? Dynamic cites the lingering economic effects of the COVID-19 pandemic, coupled with the continually rising costs of staffing, supplies, and leases. The company is in debt to the tune of $5.3 million spread out over two loans. When Dynamic originally purchased a majority stake in both brands in 2017, private equity firm AAVIN Equity Advisors served as a financial partner in the deal by supplying those two loans. Dynamic also owes another $1.2 million on a separate loan from the seller of Happy Joe's.
The combination of COVID-19 and high prices "hampered [Dynamic's] ability to continue their operations with their current footprint and otherwise timely pay operating expenses," Sacco said.
Happy Joe's appeared to be on the upswing prior to this announcement. In comparison to 2020, overall sales increased by 13% in 2021. And, the first quarter of 2022 saw sales increase by 4% year over year, making it the chain's fifth straight quarter of positive growth. The brand even recently announced plans to open over 50 locations across Egypt and the Middle East.
Sacco is optimistic about the future. "This company is really solid financially," he said. "We've got good growth going on in the company. I mean, we signed a franchisee two or three days before we filed bankruptcy."
The first Happy Joe's restaurant was founded in 1972 by Lawrence Joseph "Happy Joe" Whitty, and locations offer pasta, sandwiches, and ice cream sundaes in addition to pizza.