Restaurants continue to feel the economic crisis and unfortunately the list of well-established restaurant chains that have filed for bankruptcy since 2020 continues to grow.
In 2022 alone, we have seen the bankruptcy and, in some cases, the complete disappearance of several regional and national favorites. Hale&Hearty, a popular lunch destination in New York City, abruptly closed its 16 remaining locations in July. We also said goodbye to the final outpost of the legendary favorite by Howard Johnson in June.
More recently, Texas-based Hometown Burger said goodbye to its loyal fans in San Antonion, where it has been in business since 2016. The chain simply posted a notice saying it was closing its eight restaurants, apparently overnight. the following day.
And now a beloved pizza chain from the Midwest is joining this unfortunate group.
Dynamic Restaurant Holdings, the parent company of Happy Joe’s, filed for bankruptcy earlier this month. Dynamic also operates Tony Sacco’s, a much smaller Florida-based pizza chain. As a result, company-owned sites will close for both brands.
Known for its thin crust taco pizza, Happy Joe’s had 42 locations in Iowa, Wisconsin, North Dakota, Illinois, Missouri and Minnesota as of the end of 2021. Tony Sacco’s, meanwhile, operates four locations. A total of nine company-owned Happy Joe’s restaurants and two Tony Sacco’s restaurants were listed in the September 2 bankruptcy filing as affected. Among this group, three Happy Joe’s stores and the two Tony Sacco sites have already closed.
But this does not mean that the marks disappear completely. The bankruptcy will not affect franchised establishments of either chain, which represent 90% of Happy’s Joe’s restaurants and 50% of Tony Sacco establishments.
“I just don’t want people to be scared,” Happy Joe CEO Tom Sacco said. Local 4 News. “We’re going to be here another fifty years. Trust me.”
So what led to this decidedly unfortunate turn of events for Joe’s? Dynamic cites the lingering economic effects of the COVID-19 pandemic, coupled with continued rising costs for personnel, supplies and leases. The company is indebted to the tune of 5.3 million dollars spread over two loans. When dynamic originally bought a majority stake in both brands in 2017, private equity firm AAVIN Equity Advisors acted as financial partner in the operation by providing these two loans. Dynamic also owes an additional $1.2 million on a separate loan from the seller of Happy Joe’s.
The combination of COVID-19 and high prices “has hampered [Dynamic’s] ability to continue operations with their current footprint and otherwise pay operating expenses in a timely manner,” Sacco said.
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Happy Joe’s seemed to be on the rise before this announcement. Compared 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 leader in the chain. fifth consecutive quarter of positive growth. The brand even recently announced its intention to open more than 50 locations in Egypt and the Middle East.
Sacco is optimistic about the future. “This company is really strong financially,” he said. “We have good growth in the business. I mean, we signed a franchisee two or three days before filing for bankruptcy.”
The first Happy Joe’s restaurant was founded in 1972 by Lawrence Joseph “Happy Joe” Whitty, and establishments offer pasta, sandwiches, and sundaes in addition to pizza.