Domino’s Pizza’s franchise in Italy has entered into liquidation after a short-lived struggle to win over customers in the birthplace of pizza.
A Milan-based judge opened liquidation proceedings for Domino’s franchise partner, ePizza, last week, according to a filing with the local chamber of commerce seen by Bloomberg News.
A court-ordered liquidation could result in a recovery for creditors of 5% of their exposure, according to a draft restructuring plan seen by Bloomberg News that was submitted last year by the Milan-based firm and its financial advisers.
The last of Domino’s 29 Italian branches closed last summer, ending a foray that began in 2015 with the U.S. brand touting pizza toppings that included pineapple and barbecue chicken, an unusual take in a country more accustomed to thin-crust margheritas. Over the years, the American fast-food chain’s partner borrowed heavily for ambitious plans to open 880 stores.
The pandemic, however, hobbled ePizza. COVID-related lockdowns deprived the company of 35% of its revenue from 2020, as did rising competition. Once largely bricks-and-mortar focused, Italian pizzerias ramped up their home delivery offerings through third-party services such as Deliveroo or Glovo, hurting demand for Domino’s pies.
A representative for Domino’s didn’t respond to a request for comment. A representative for ePizza couldn’t be reached for comment.
All those challenges led ePizza to fall behind on its debt payments, with talks on a potential rescue failing to bear fruit. As of May 2022, it had 19.3 million euros, or $20.8 million, of debt, of which 5.3 million euros were owed to banks, according to the draft restructuring plan.
The Milan tribunal has set a hearing on ePizza’s liquidation for June 21, according to the first filing.