America's Pizza Business Is Feeling The Squeeze As Another Chain Files For Bankruptcy While Domino's, Papa John's Warn Consumers Are Pulling Back

Amid mounting pressure on U.S. pizza chains from weaker consumer spending and slowing restaurant traffic, Washington-based wood-fired pizza chain Smoking Monkey Pizza filed for Chapter 11 bankruptcy this week as it seeks to restructure its debt and reorganize operations. Parent company TB Enterprises LLC filed for bankruptcy protection Tuesday in the U.S. Bankruptcy Court for the Western District of Washington in Seattle, according to court filings. The filing lists assets of up to $50,000 and liabilities ranging between $100,000 and $500,000. The bankruptcy adds to broader troubles across the pizza industry, with major chains including Pizza Hut, Domino’s Pizza (NASDAQ:DPZ) and Papa John’s International (NASDAQ:PZZA) flagging weaker consumer demand and softer sales trends amid persistent inflation and cautious discretionary spending. The largest unsecured creditors listed in the court papers include the Washington Department of Revenue, Sysco, Chase Card Services, Gravity Payments, Greco and Puget Sound Energy, all owed amounts ranging from about $34,000 to more than $52,000. TB Enterprises previously operated three Smoking Monkey Pizza locations in Washington, but its Spokane outlet closed about two months ago. The company's Renton and Seattle locations remain open. Read Also: Why Is Wendy's Stock Surging Over 14% In Tuesday Pre-Market? Pizza Chains Grapple With Weak Consumer Demand The filing underscores the difficult operating environment facing restaurant chains. In 2025, the industry experienced a challenging economic backdrop, with customer traffic declining every month except July, according to data from Black Box Intelligence and CNBC. Against that backdrop, Yum! Brands (NYSE:YUM) said Pizza Hut plans to close around 250 underperforming U.S. restaurants in the first half of 2026 as part of its ongoing "Hut Forward" strategy. Chief Financial Officer Ranjith Roy said the closures account for only a small portion of Pizza Hut's global footprint, while the company expects to complete its review later this year. Meanwhile, Domino’s Pizza posted first-quarter earnings and revenue below Wall Street expectations, reflecting pressure from budget-conscious diners. Revenue rose 3.5% year over year, supported by higher supply chain and franchise-related income, though weaker same-store sales pointed to softer consumer spending as inflation and broader economic pressures weighed on dining-out demand. At the same time, weak North American demand, cautious consumer spending and intense promotional activity in the quick-service restaurant sector weighed on quarterly results at Papa John’s International, despite growth in its international business and expansion efforts. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image via Shutterstock Read Also: McDonald's Stock Hits 52-Week Lows: High Gas Prices Could Make Things Worse