Pinstripes Inc, the dining and entertainment venue operator, is working with financial advisor Piper Sandler as it is operating under a forbearance agreement with lenders due to a covenant breach, according to three sources familiar with the matter.

The upscale brand that offers bowling, bocce and Italian-American cuisine to affluent suburban customers has been struggling with a drop in foot traffic due to macroeconomic headwinds.

On November 26, Pinstripes issued a going concern warning about its ability to raise new capital, attract new customers and retain existing customers due to the labor shortage and inflation costs.

Two months later, the Northbrook, Illinois-based company entered into agreements with its main lenders—Oaktree, Silverview and Granite Creek—to amend loan terms. It had USD 61.4m in senior notes with Oaktree, USD 35.6m in term loans with Silverview and USD 15.9m in equipment loans with Granite Creek as of 31 October. The lenders agreed to forbear from exercising any rights or remedies with an event of default under the loan agreements until 28 February. This gives the company less than a month to figure out the next steps, according to one of the sources familiar.

As part of the agreement, Oaktree provided a new USD 6m loan and allowed the 20% annual interest on the loans to be entirely paid in-kind (PIK), compared with 12.5% cash plus 7.5% PIK in the previous agreement.

Its agreement with Silverview reduces the interest on its term loan to 12.5% from 15% for the first six months of 2025, allowing a portion of interest to be PIK, suspending principal payments for fiscal 2025 while also eliminating certain financial covenants and prepayment premiums. Finally, the agreement with Granite Creek allows 3% of the interest payable on the 12% loan to be PIK for 2025 while the required principal payments were also reduced through 31 December 2025, according to SEC filings.

Unfortunately, Pinstripes had an ambitious plan coming out of the COVID-19 pandemic to aggressively expand large venues to build combined bowling, bocce and dining complexes during an unstable time in the industry, the third source said.

“This is a case of building more and more stores with expensive money, and they are not getting any profit out of it,” said John Gordon, founder and principal at Pacific Management Consultant Group, a restaurant analyst and management consulting firm based in San Diego. The cause of their demise was fundamentally due to the collapse of high-priced dining and entertainment demand in the US, he noted.

It opened four new stores during its 2Q25, which ended 13 October, giving it 17 locations in nine states. It had plans to grow to 100 total locations, according to the company.

Pinstripes generated a 5% EBITDA margin, which does not provide enough coverage for debt service, capital spending and general and administrative costs, Gordon noted. Total revenue was USD 26.5m, the venue level EBITDA margin was 5% or USD 1.32m, for 2Q25. That venue-level EBITDA margin needs to be in the 15%-plus zone, he said. As of 2Q25, Pinstripes had just USD 3.2m in cash.

Pinstripes was founded in 2007 and combined with special purpose acquisition company Banyan Acquisition Corp to become public on 29 December 2023.

Pinstripes and Piper Sandler did not provide comments.