According to CNN, Pizza Hut will close 300 of its restaurants following bankruptcy.
It was announced on Monday that Pizza Hut’s owner, Yum! Brands will close a quarter of its restaurants and sell the remaining locations.
“NPC International, which filed for Chapter 11 in July, announced an agreement Monday with Pizza Hut’s owner Yum! Brands (YUM)to close roughly a quarter of its restaurants and sell the remaining locations. Specific restaurants and timing have not yet been determined, but NPC said a “substantial majority” of affected locations have dining rooms.”
Coronavirus shutdowns, nearly $1 billion debt, and rising labor and food costs are said to have contributed to the filing of bankruptcy.
“The agreement provides NPC with “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,” it said in a release. A perfect storm of coronavirus-related shutdowns, a massive debt burden of nearly $1 billion and rising labor and food costs tipped NPC into bankruptcy.”Pizza Hut stated the 300 locations “significantly underperform” compared to other NPC locations. CNN also reports that they will help employees find jobs at other Pizza Hut restaurants.
The chain has shifted away from opening and operating restaurants with dining rooms. Instead, it is encouraging customers to order pick-up through its website or third-party apps.
As the company works to shift their model from dine-in, they’ve encouraged customers to stick with carryout and order through a third-party app.
NPC’s 1,227 Pizza Hut locations account for 20% of the chain’s 7,000 US locations, according to CNN.
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