Major Pizza Hut, Wendy’s franchisee files for bankruptcy

Marco Green
July 3, 2020

According to NBC, NPC International Inc., operator of more than 1,200 Pizza Huts and almost 400 Wendy's restaurants, has filed for Chapter 11 bankruptcy. While sales did improve during the Covid-19 pandemic, the amount of debt ($903 million in fact) was too much to keep this company afloat and the company failed to reach an extended forbearance agreement with Yum Brands, the parent company of Pizza Hut and Wendy's.

As CNN reports, privately-held NPC, which also franchises Wendy's restaurants, has been dealing with "a ideal storm of problems" that led to the Chapter 11 filing, including coronavirus-related shutdowns, its massive debt burden and rising labor and food costs.

"As we go through this process, that focus on providing outstanding and safe service to guests in our Wendy's and Pizza Hut restaurants will not change".

There are around 7,100 Pizza Huts across the United States, meaning NPC International operates around 17 per cent of all the restaurants.

It's unclear if any Pizza Hut and Wendy's restaurants will permanently close; all locations are expected to remain open in the short term during the bankruptcy and restructuring process. Brands, pointed toward a recent filing showing that sales at its USA restaurants open at least a year have begun rebounding off their March lows.

A banner announcing Now Serving Breakfast is shown outside a Wendy's restaurant in New York City, on March 2, 2020.

The bankruptcy will "substantially reduce" the company's long-term debt and "optimize its portfolio of restaurants throughout the country", the statement says.

The company operates about 6 per cent of the 6,500 Wendy's restaurants that are open across the country.

For one franchisee, business is looking grim.

"We 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", the burger chain said. Le Pain Quotidien filed in May, and announced plans to close all 98 US stores, but a partial buyout by Autify Brands will keep less than half of its locations open for business.

Other reports by Click Lancashire

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