Up To 300 Pizza Hut Locations Are Set To Close Following A Bankruptcy By The Chain’s Biggest Operator

Update, August 17, 2020 4:34 p.m.: Up to 300 Pizza Huts in the United States are set to close following the news that NPC International, the chain’s largest operator, filed for bankruptcy earlier this summer.
The company announced the news in a release today, saying that the substantial majority of these restaurants are dine-in. No date for closings or specific locations have been determined. The company also said that it will be putting its Pizza Hut system up for sale. The franchisee currently owns 20 percent of the Pizza Hut system’s restaurants in the U.S.
NPC International said it will aim to reallocate employees at the closed locations to other NPC and Yum! brand locations where they can.
Original, July 1, 2020 12:15 p.m.: The largest operator of Wendy’s and Pizza Hut franchises in the U.S. filed for bankruptcy today, according to Restaurant Business Online.
NPC International’s Chapter 11 filing was not a surprise, according to RBO, saying that the company has been dealing with debt in recent years (which currently totals $903 million), along with low sales at its Pizza Hut locations. The “uncertainty” of the COVID-19 pandemic has also played a part, with Pizza Hut sales spiking at the beginning, but reportedly starting to fall recently. Wendy’s sales, however, have reportedly been improving recently after an initial fall. NPC operates 1,200 Pizza Hut locations and about 400 Wendy’s locations, according to CNBC, and it expects that its restaurants will keep operating during its bankruptcy process.
“As our industry has been in the midst of dynamic changes due to shifting consumer preferences and dining behavior, we also have been facing increased labor and commodities costs and a higher level of financial leverage that presents obstacles to achieving our long-term business objectives,” said CEO & President of NPC’s Pizza Hut division Jon Weber in a statement: “These challenges have been magnified recently by the impact and uncertainty of COVID-19, and we believe it is necessary to take proactive steps to strengthen our capital structure, so we have the financial flexibility to continue to adapt to current industry trends.”
In a statement to RBO, Pizza Hut said they viewed the operator’s filing as an opportunity for the company to strengthen their franchises.
“These changes will help NPC’s Pizza Hut restaurants generate the same momentum we are seeing throughout the Pizza Hut U.S. business and strengthen the overall health and performance of the entire system for the long term,” they said in part.
Wendy’s told CNN that its NPC-operated locations were “generally performing very well” and that they “expect that NPC will continue to be a productive member of the Wendy’s family, and we will continue to stay closely coordinated and support them moving forward.”


Source: Read Full Article