News of MOD Pizza’s acquisition has left many wondering where to from here for the fast-casual pizza chain.
After days of speculation about whether the 512-unit MOD would be filing for Chapter 11 bankruptcy last week, the company instead announced that it has a new owner.
Elite Restaurant Group, a Los Angeles-based company that has been collecting struggling restaurant chains for years—many out of bankruptcy—has acquired 100% equity in Bellevue, Washington-based MOD.
No details about the deal were disclosed. But who is this new parent company?
It’s a bit of a mystery. Not much is known currently about the company, which is led by Michael Nakhleh. He did not immediately respond to requests for an interview or more information. Elite does not appear to have a website, and the company has been a bit press shy in recent years.
In terms of unit count alone, it’s the biggest known deal so far for Elite, which over the years has acquired brands ranging from the bacon-focused burger concept Slater’s 50/50, to the family-dining Marie Callender’s, the San Francisco Bay Area-born Patxie’s Pizza, and the fast-casual Greek concept Daphne’s.
Other brands Elite has acquired include Gigi’s Cupcakes and, possibly, Mimi’s Café, though the latter is unclear. Elite once listed Mimi’s Café among its brands in a press release. Also, last year, there were rumors that Elite bought the then-20 unit fast-casual Lemonade concept from Modern Restaurant Concepts, but that could not be confirmed.
Emails to press contacts for these brands either bounced back or the brands did not response. Calls to restaurants also did not give clear answers.
But here’s what can be gleaned about Elite’s history, mostly from prior press accounts:
Nakhleh bought his first restaurant at age 18, a pizza shop that sold for $45,000, he told Restaurant Business in 2018. He later went into banking, but came back to restaurants after the Great Recession, initially as a franchise operator of the Fatburger and Sizzler brands.
He later sold those Fatburger and Sizzler restaurants, and began shopping to buy distressed restaurants out of bankruptcy—in part because he enjoyed the challenge of buying struggling brands, he said at the time.
“Anyone can buy something that is doing very well and just enjoy the ride,” he told Restaurant Business’ Heather Lalley. “To me, that is boring.”
Nakhleh’s buying streak began in 2016 with the purchase of Slater’s 50/50, a once-hot casual dining concept built around burgers made with beef blended with ground bacon. Founder Scott Slater stayed on as “baron of bacon” for a time (he has since has since moved onto create new concepts, and is no longer involved.)
The chain had six units and Nakhleh planned to launch franchising, and he did. Slater’s website lists eight units, including one that opened in January in Torrance, California.
The Elite’s acquisitions picked up in 2018.
In April that year, Elite picked up Daphne’s, a Greek-inspired fast-casual chain that at the time had 23 units, all in California. Born initially as Daphne’s Greek Café in 1991, the chain had been through bankruptcy reorganization and had been bought and sold twice before Elite came into the picture.
As with Slater’s 50/50, franchising was in the plans and Elite invested in a new remodeled design for Daphne’s.
Later that year, Elite acquired the then-12-unit Noon Mediterranean chain out of bankruptcy for less than $800,000. Noon Mediterranean was first known as VertsKebab and then later just Verts, and had roots in Austin, Texas.
The plan at the time was to create a hybrid of the two concepts. But by 2019, 11 Daphne’s units in Texas were shuttered.
Now, Daphne’s website lists four locations. Noon Mediterranean’s website now lists two units: in Boston and Rhode Island.
In September 2018, Elite acquired the 17-unit Patxi’s Pizza, a deep-dish concept based in Sausalito, California, which at the time was owned by private-equity firm KarpReilly LLC. Nakhleh also launched franchising for that brand and planned for expansion.
Patxi’s website lists eight locations, but that included a franchised unit in Seattle that reportedly closed earlier this year. That report indicates there were nine other units in California and Hawaii.
In 2019, Elite acquired the Gigi’s Cupcake chain out of bankruptcy, for about $1.2 million. A boutique bakery franchise born in Nashville, Gigi’s at the time had 68 units, so the acquisition brought Elite’s portfolio to 120 locations with gross sales of nearly $150 million at the time.
Gigi’s website now lists 40 bakeries in 17 states.
Later that year, Elite acquired the MOD competitor Project Pie, which was founded by James Markham, who also helped develop MOD Pizza in early days. There do not appear to be any Project Pie units still open in the U.S.
In November 2019, Elite bought the once-iconic pie and family-dining chain Marie Callender’s, which at the time included 28 units that were open following the bankruptcy of former parent company Perkins & Marie Callender’s Inc. The company’s website indicates there are 27 Marie Callender’s locations currently.
In 2021, Elite listed Mimi’s Café among its brands in a press release, but it’s not clear who the current parent is for that chain, once owned by LeDuff America, and now called Mimi’s Bistro & Bakery.
In announcing the acquisition of MOD, officials said Elite was focused on accelerating growth. The 512-unit chain includes 89 franchised locations.
Some observers, however, blame MOD’s troubles of late on its too-rapid expansion. Prior to the sale, turnaround efforts this year have included the closure of 44 underperforming units as part of a “right-sizing.” It’s not clear whether more restaurants will be closed.
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