Sbarro, the US Pizza chain, filed for bankruptcy protection for the second time in three years, according to LA Times.
The Merville, N.Y. company asked for Chapter 11 protection while it tries to organize its finances. The court papers mentioned that the pizza chain has between $100 million and $500 million in both assets and liabilities.
The rating agency Fitch reported that the restructuring will hopefully affect $ 140 Million of Sbarro Debt.
It can be recalled that Sbarro had filed for bankruptcy in April 2011, but emerging from it next November.
Fitch also revealed Colorado's popular Sandwich shop, Quizno's is nearing bankruptcy.
The troubles of this medium-sized restaurants are "a warning sign of financial distress" that many brands in the restaurant industry are experiencing, Fitch said.
"We do not view them as portending a widespread increase in bankruptcies of US restaurants, but a reflection of difficulties faced by brands that have lost their competitive position and relevancy with consumers," Fitch told NBC News.
Sbarro admitted that customers visiting shopping centers are declining by the year. It is the same reason Hotdog on a Stick cited on their bankruptcy report last February.
The growth of competitors like Subway, Little Caesars and Papa John's also contributed to the 68-year-old Italian specialty chain's financial difficulty.
The LA Times got a hold of Sbarro's official statement that their filing for bankruptcy is to "implement a pre-packaged reorganization plan" and allow for a speedy exit from bankruptcy so that the new management team can re-form the business.
Sbarro also said last month that it was cutting 155 restaurants in North America to reduce costs.
Sbarro was put up in Brooklyn, New York in 1956 by Gennaro and Carmela Sbarro, an Italian couple who originated from Naples. Their food chain eventually grew in the New York City area before adapting typical restaurant format in 1967.
Sbarro remains hopeful and stated officially that they "remain a strong and vibrant brand."
