American restaurant chain Pizza is closing up to 300 of its outlets in the United States. The decision to permanently close a portion of its locations came after one of its largest franchisees, NPC International, filed for bankruptcy.
Apart from its bankruptcy filing, NPC International announced on Monday that it had reached a separate agreement with Pizza Hut owner Yum! Brands. NPC agreed to sell around 75 percent of its remaining locations in the country to Yum! Brands, while the rest of the branches will be shut down permanently. NPC did not specify which of its hundreds of braches would be closed but it did mention that most of them would be those that are equipped with dine-in rooms.
In a press release, NPC stated that the agreement with Yum! Brands should allow it to maximize the outcome of its bankruptcy filing and its financial restructuring. The company said it is confident that it can come out of bankruptcy. The company was forced to file for bankruptcy protection after it had to shut down its franchised outlets due to the pandemic. Coupled with its mounting debts, which have reached nearly $1 billion, the company had no other choice but to seek protection from the courts.
Pizza Hut announced on Monday that it will be actively helping employees affected by NPC's bankruptcy to find jobs at its other restaurants. The franchise, which is the world's largest in terms of locations with over 18,703 outlets worldwide, is also implementing its own overhaul. The company is planning to shy away from traditional outlets with dining rooms while it encourages customers to order pizza deliveries through its website and other online channels.
The pizza chain mentioned that it will be working closely with NPC and its lenders to optimize the outcome of the bankruptcy. It added that the closure of NPC's "underperforming" restaurants will be a key step into creating a healthier business for its largest franchisee.
NPC owns 1,277 Pizza Hut restaurants, representing about 18 percent of the pizza chain's total locations in the United States. Apart from Pizza Huts, NPC also owns about 6,500 Wendy's restaurants in the country.
In Yum! Brands' second-quarter earnings report, its Pizza Hut brand experienced a 21 percent same-store sales growth throughout the three-month period. While other brands may have suffered losses, Pizza Hut's sales numbers remained strong as more people stuck at home ordered more pizzas for delivery.
