Financial management issues lead to closing Sbarro restaurants
On behalf of Bankruptcy Law Firm of Clare Casas on Tuesday, February 25, 2014.
Sbarro, the chain known for its shopping mall pizza and Italian fare, is still attempting to bounce back after emerging from a previous bankruptcy filing. The chain has made the decision to close 155 of its company-owned restaurants, including restaurants located in Florida, in an attempt to overcome financial management issues. Franchises are not influenced by the decision.
One of the problems faced by the company seems to be the decrease in consumer spending -- something which has caused a decline in people visiting shopping malls across the nation -- and has also led to the decision to close many of its restaurants in the U.S. This decision was made in an attempt to increase the profitability of the company. Sbarro faces the challenges that seem to plague many other companies in the competitive pizza market as far as the rough economy and growing prices of ingredients is concerned. Another part of the problem appears to lie in the ownership agreement made when the company exited bankruptcy in 2011.
It is important for the company to resolve financial management issues in order to overcome the problems created by a slow economy. However, companies and individuals in Florida who find themselves in situations where it seems impossible to overcome these types of problems may find filing for Chapter 7 or Chapter 13 bankruptcy to be a viable solution. In each instance, an evaluation of the financial position may be the best way to determine the most beneficial path to take.
A chapter 7 bankruptcy asks of the debtor to surrender all assets considered non-exempt to the appointed trustees. A Chapter 13 bankruptcy allows the company or a person filing for bankruptcy to reorganize debt and repay debts according to an agreed payment plan. In each instance, the benefits of filing for bankruptcy is that it provides the company or individual with financial relief from financial management issues and an opportunity to reorganize and rebuild.
Source: sfgate.com, Sbarro Closing 155 North American Locations in Comeback Effort, Lauren Coleman-Lochner, Feb. 19, 2014