Falling oil prices blamed for restaurant chain Zio’s entering Chapter 11

pasta dish from Zio's restaurant chain
Italian restaurant chain Zio’s has filed for Chapter 11 bankruptcy. (Source: Zio's/Facebook)

Italian restaurant chain Zio’s has filed for Chapter 11 bankruptcy, citing an economic slowdown driven by falling oil prices.

The chain will continue normal operations at its 16 locations in Texas, Colorado, New Mexico, Kansas, Missouri, and Oklahoma during the process.

Peter Donbavand, VP for business development at Food Management Partners – the chain’s owner – said Zio’s has seen a sales drop of more than 10 per cent over the past 12 months.

Donbavand blamed a “downturn in economy driven by low oil prices” which resulted in a reduction in high-paying oil jobs in many markets. Other contributing factors include the general erosion of sales in the casual dining segment and high rental rates.

The company said the Chapter 11 filing will allow it to restructure debt and liabilities and implement a series of cost-cutting measures.

In November, casual dining chain TGI Fridays entered Chapter 11 amid financial challenges resulting from Covid-19.

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