The U.S. chain Oath Pizza, known for its innovative pizzas and strong presence in cities such as Boston, California and Boston, has announced the definitive closure of all its branches. The decision comes after the parent company, Next Level Pizza Inc. filed for Chapter 7 bankruptcy under the U.S . Bankruptcy Act in October 2024.
Oath Pizza’s unsustainable debts and imminent closure
According to official reports, Oath Pizza accumulated debt in excess of US$50 million. This is a very high figure compared to its assets, which barely amounted to US$500,000. This led the pizza chain to take drastic measures, including the liquidation of all its remaining assets, declaring bankruptcy.
This company, founded in Boston and known for its customizable options, operated 17 locations in 22 states. It had branches in New York, California, Massachusetts and Pennsylvania. However, by the end of 2023, they had already closed 7 locations, which boded rather bleakly for the future.
The final blow came this year, when Oath Pizza accelerated the process of closing more restaurants. It is estimated that the few remaining locations in operation will close definitively during the course of 2025. Thus, the history of this well-known chain will come to an end.
What drove this pizza chain into bankruptcy?
There are multiple factors that caused this pizza chain to go bankrupt. The following factors seem to have contributed to the collapse of the company, which eventually led to the closure of most of its stores:
- Unsustainable debts: the inability to repay its creditors represented one of the main reasons for the bankruptcy filing.
- Fierce competition: the U.S. pizza restaurant market is highly competitive. There are a large number of giant companies such as Domino’s and Pizza Hut that dominate the sector.
- Inflation and rising costs: Inflation and high operating costs in the wake of the COVID-19 pandemic dealt a severe blow to fast food companies.
- Lack of sustained expansion: despite its presence in large cities, the pizza chain failed to achieve a solid expansion and a large enough customer base to keep its operations active.
Bankruptcy in the USA: Oath, one more example of a complicated year for food companies.
The bankruptcy of this pizza chain adds to the list of food companies that have faced economic difficulties this year. This case highlights the current challenges that the food industry is constantly facing. In particular, this affects emerging brands that are struggling to stay competitive with established companies.
With inflation driving up the cost of basic inputs and higher minimum wages in several states, the company’s operating costs increased. In its case, Pizza Oath bet on innovation, which shows that, in a saturated market, this innovation must be accompanied by solid expansion and strategies that ensure long-term profitability. This is something that the brand was unable to achieve.
As we have already said, the case of Pizza Oath is just one more in a growing list of businesses that failed to weather the storm. And to be clear, the failure of this pizza chain is not due to poor management of the company, but to the complicated economic situation in the United States. This does not distinguish between large and small companies, as several giants have also reduced their branches and left thousands of workers without jobs.
