Nearly 300 Pizza Huts Will Close Down After Major Franchisee Declares Bankruptcy

As a result of their biggest franchisee declaring Chapter 11 bankruptcy, Pizza Hut will be closing about 300 of their restaurants across the U.S.

August 19, 2020

In the wake of their largest American franchisee declaring bankruptcy, Pizza Hut will be closing down nearly 300 of their restaurants in the U.S.

This grim news, which had previously been forecasted, comes after NPC International filed for Chapter 11 last month. On Monday, an announcement was made in which it was said that Yum! Brands (Pizza Hut's owner) had made an agreement to close about a quarter of NPC International's roughly 1200 locations. The remaining three-quarters will be sold. It's not clear which actual restaurants will shutdown (nor is it clear when those restaurants will shutdown) but it has been reported that a "substantial majority" of those affected will be Huts with dining rooms.

NPC hopes that the agreement will allow them "flexibility to explore options for achieving a value maximizing outcome as it seeks to finalize the terms of a comprehensive financial restructuring and emerge from Chapter 11," according to a press release.

CNN reports that the closures were caused by a lethal combo of pandemic-caused restaurant shutdowns, a debt burden of nearly $1 billion, and the rising costs of labor/food.

On Monday, Pizza Hut said that the 300 locations getting the ax were locations that "significantly underperform[ed]" relative to their other locations. They further state their intent to help employees at those restaurants get positions at other Pizza Huts nearby.

In recent times the once-dominant pizza chain has attempted to get away from restaurants with dining rooms, while trying to get customers to order carryout through their website/apps.

Pizza Hut released a statement in which they said: "We have continued to work with NPC and its lenders to optimize NPC's Pizza Hut restaurant footprint and strengthen the portfolio for the future, and today's joint agreement to close up to 300 NPC Pizza Hut restaurants is an important step toward a healthier business."

Note that, prior to this news, there are more than 7,000 U.S. locations of Pizza Hut operating. NPC's batch (which has been pinned at 1,227) makes/made up about 17.5 percent of those.