The pandemic episode, with almost half a year in, is still affecting many businesses, even the popular brands. With many companies succumbing to bankruptcy protection, a giant franchisee in the US will be forced to shut almost 300 Pizza Hut locations for good. Most of which are dine-in, with many preferring the “add-to-cart” system.
Removing the Underperformers
The giant franchisee, which is also among the largest restaurant operators in the country, is NPC International. Last month, they filed for a Chapter 11 bankruptcy protection as it faces a debt of about $1 billion. More recently, it announced a deal it made with Yum! Brands, the parent of Pizza Hut and owner of other fast food chains like KFC and Taco Bell.
The agreement entailed closing those low-performing locations, with many of them are for dine-in. This could likely be the pandemic forcing people to stay at home, who prefer takeout and delivery services.
As of writing, there are no details yet of which particular locations will be affected by this move. The giant franchisee also owns about 400 Wendy’s restaurants.
Pizza Hut also thinks of one possibility of retaining those who may be out of jobs, per the company’s statement. Those employees that will be displaced due to the shutdown of Pizza Hut restaurants will be reassigned to other Pizza Hut locations, if they can.
Pizza Hut Towards New Shelter
Moreover, NPC will be selling the other remaining Pizza Hut restaurants, which is almost a thousand in numbers. NPC has franchised almost one-fifth of all the US Pizza Hut restaurants, according to CNBC. The US has at the moment around 7,000 Pizza Hut restos, per the Associated Press.
Pizza Hut will close up to 300 locations operated by bankrupt franchisee NPC International. https://t.co/vUIaofn4EX
— CNBC (@CNBC) August 18, 2020
In a statement provided by Pizza Hut spokesperson to CNBC, “In the event NPC executes a sale of its Pizza Hut business, Pizza Hut’s focus would be to ensure that new ownership brings to NPC’s Pizza Hut restaurants a strong capital structure, healthy balance sheet, commitment to operational excellence, and a growth mindset.”