All things considered, it’s been a surprisingly decent year for bigger pizza chains. While other restaurants have struggled (all too often unsuccessfully) to stay afloat, pizza quickly became a pandemic staple back when delivery was the only game in town.
Though it might seem like Pizza Hut would have a license to print money at a time like this, NPC International, one of its biggest franchisees has struggled to the point of filing for bankruptcy back in July. Now, up to three hundred Pizza Huts could close as part of a deal between the brand and the largest franchisee in the fast food world.
According to a bankruptcy-related filing cited by Business Insider, NPC International believes that closing that many Pizza Huts will be essential to the company’s restructuring process. As of now, it plans to sell off the entirety of its Pizza Hut business, which consists of one out of every five Pizza Hut locations in the US. Even if the major franchisee closed those 300 Pizza Huts without selling off their Pizza Hut business as a whole, they’d still have more than 900 in their portfolio, not to mention more than 400 Wendy’s locations.
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While NPC International is the party filing for bankruptcy, documents related to the Chapter 11 proceedings find them laying some of the blame for their slump at Pizza Hut’s feet. Part of that has to do with the fact that Pizza Hut’s lost a bit of market share to rivals like Domino’s and Papa John’s (who’s had its own share of public struggles in recent years) over time, a problem even a pandemic-induced sales bump couldn’t help the massive franchisee overcome.
"Deteriorating brand recognition has been further exacerbated by decreased menu innovation and the lack of a clear, long-term strategy by the Pizza Hut Franchisor to address the brand issues to provide a clear and differentiated identity," NPC said in its Chapter 11 filing according to Business Insider.
While it’s notable that hundreds of Pizza Huts could close, it’s far from the only example of the pandemic impacting the footprint of large food chains. Dunkin’ said it would close hundreds of locations, and more closures could certainly follow. At the same time, you’d have to think that if Pizza Hut’s biggest franchisee can’t even hang in there right now, then pretty much every restaurant around must be hanging on for dear life.
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