Financial pressures pushed Bertucci’s to file for Chapter 11 bankruptcy in late April, after foodies saw the chain close several locations to reduce losses.
Bertucci’s, an Italian restaurant chain founded in 1981, is well-known for its brick oven pizza and pasta.
The chain, which competes with Olive Garden and Maggiano’s, has struggled to remain viable in the competitive restaurant industry.
Before its most recent bankruptcy filing on April 24, Bertucci’s closed seven underperforming locations to reduce losses, including five in Massachusetts, one in Rhode Island, and one in Maryland.
The company hopes that the bankruptcy process will give Bertucci’s a “breathing spell” so it can “determine the best path forward and formulate an overall reorganizational plan,” according to the filing.
Bertucci’s attributed its third bankruptcy to a variety of factors.
“With losses accumulating, inflationary pressures still high, and industry headwinds gusting, the proverbial final straw fell on [Bertucci’s] this year as the world saw food costs soar, consumer spending slow, and an uncertain global economy falling in (and out) of decline,” according to the business.
Bertucci’s struggles over the years culminated in three bankruptcy filings and a string of closures, leaving the chain with only 15 locations.
Massachusetts
- Boston
- Chelmsford
- Chestnut Hill
- Framingham
- Hingham
- Medford
- Newton
- Reading
- Waltham
- Westborough
SALTY STUGGLES
Joseph Crugnale, an Italian immigrant, founded Bertucci’s more than 40 years ago.
Bankruptcy is a specific legal process that helps companies eliminate debt they can’t repay.
The process allows businesses to start fresh and gain access to new credit.
Supervised by federal courts, bankruptcies allow a company to sell off its assets more easily to pay off creditors, according to Investopedia.
Chapter 11, a common process for companies, is used to restructure a business with the goal of remaining open – even if it means selling off most of the company’s properties.
Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.
Chapter 15, alternatively, allows for collaboration between American and foreign courts to conduct bankruptcy proceedings with “parties of interest involving more than one country,” per the United States Courts.
By 1989, USA Today had ranked the restaurant chain as one of America’s top ten pizza restaurants.
The Massachusetts-based company quickly gained popularity among foodies, growing to approximately 100 locations by the end of the 2000s, primarily along the East Coast.
Bertucci’s, on the other hand, has seen a sharp decline in success as pressures have increased over time.
Bertucci’s declared bankruptcy and closed 15 restaurants in April 2018, citing increased competition from fast-casual chains, a saturated restaurant market, and weak consumer demand.
The Italian chain then filed for Chapter 11 bankruptcy again in December 2022, reducing its restaurant count to just 23.
Bertucci’s cited COVID-19-related issues, such as the nationwide shutdown and high inflation.
Despite the chain’s third bankruptcy filing last month, Bertucci’s is hoping to successfully reorganize its operations for a long-term and successful future.
A bankruptcy filing does not always indicate that a business is doomed.
For example, following On The Border’s bankruptcy filing, a popular restaurant brand has launched a massive menu takeover.
In addition, another well-known restaurant chain has triumphantly returned after declaring bankruptcy more than two decades ago.
