The food company reached the situation most feared by all those business entrepreneurs.
The Oath Pizza pizza chain in the United States He had to face bankruptcy after 9 years where he had experienced great success. It was born in 2015 and opened stores in New York, Boston and California. The firm’s original idea was to offer pizzas that were cheaper than those of the rest of the chains and with healthier ingredients.
It didn’t take long for it to grow and make pizza lovers fall in love with it, since it was considered to have high quality ingredients in addition to a dough dipped in avocado oil. This success in a short time made investors want to bet their money on the company, raising funds worth $30 million.
Oath Pizza
Why Oath Pizza went bankrupt
Bankruptcy is considered to be the situation that a company is experiencing not being able to pay your debts because your financial obligations exceed your ability to pay or the value of your assets. Since the emergence of the Covid-19 pandemic, there have been several and diverse companies that have gone bankrupt. Since 2020, companies that depend on the movement of people began a downward spiral that seemed to have no end.
In order to face these situations, They had to take out loans that later became unsustainable. In addition to the pandemic, there are also changes in consumer habits. The expansion of online commerce caused thousands of businesses to have to reinvent themselves to survive.
Therefore, despite the expectations generated in its first months, the quality fast food project failed to be profitable, causing numerous economic losses that foresaw the chronicle of a death foretold. Oath Pizza’s debt was over $50 million, and its assets were worth just $500,000.
He tried to overcome the situation. It tried to grow through franchises, managing eight of its own stores and 22 under this model, but in 2022 it declared bankruptcy and the court ordered the liquidation of its remaining assets.
Source: Ambito
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