Mod Pizza, a fast-casual restaurant with more than 500 locations across the U.S., has reportedly closed dozens of stores in recent weeks, including five of its California restaurants.
According to Fox26News, a total of 27 Mod Pizza restaurants were shuttered across the U.S. in total, though the company has yet to comment on the widespread closures.
In California, the closures occurred on March 22, just days before a controversial new minimum wage law went into effect on April 1, raising the minimum hourly rate for fast-food employees in the state from $16 to $20 per hour. The move is designed to benefit workers, but is widely opposed by restaurant operators, who claim they won’t be able to turn a profit. According to the LA Times, the law has already led some major chains, including McDonald’s and Starbucks, to indicate that they will be “changing their operations” and/or raising prices—effectively passing the cost on to diners.
Mod Pizza, which stands for “made on demand” pizza, was founded in Seattle in 2008. The chain, once deemed “the Chipotle of the pizza industry,” sells individual, customizable pizzas cooked at high temperatures in stone ovens. Employees at the Clovis, CA, location (near Fresno) told Fox26News that the company was not transparent about the closures, informing them only two days before their final shifts. (In California, employers are required to give 60 days’ notice before a mass layoff.) They speculated that the closures were a direct result of the minimum wage increase.
“It just kind of seemed like the right timing, two weeks before all of the fast-food locations in California got that increase that we closed,” one former Mod Pizza employee, who remained anonymous due to a nondisclosure agreement, told Fox26News.
California’s new law applies to fast-food restaurant workers only; the minimum remains $16 in other industries operating in the state, according to the California Labor Commissioner’s Office.
The Clovis location was emptied and stripped of its signage and 15 employees were let go. While they were not relocated to other Mod Pizza restaurants, they were reportedly given $2,000 in severance pay, per the New York Post.
No reason was given to employees for the closures and mass layoffs.
“I do have a feeling it had to do with the $20 an hour increase, seeing as they knew it was coming,” said the anonymous former Mod employee.
While some employees were initially in favor of the minimum wage increase, others now feel that the law may wind up doing more harm than good.
“I mean, nobody is going to turn down a raise, but at the end of the day, with repercussions like this, was it worth it?” said the former Mod employee.
As for the Mod Pizza closures outside of California, a complete list has not yet been reported. But we do know that a Wisconsin location of Mod Pizza also closed abruptly, reportedly leaving some employees without paychecks. The only two Mod locations in New Jersey also shuttered without warning on March 22.
“This location is permanently closed. We are incredibly grateful for your patronage and support over the years” read signs on the doors.
