LEAWOOD, KAN. — NPC International, Inc., a major franchisee of Pizza Hut restaurants, announced on Aug. 17 that it would close as many as 300 locations.
An agreement was reached with Pizza Hut’s parent company Yum Brands Inc., following NPC filing for Chapter 11 bankruptcy protection in July. The franchisee explained that no final determinations had been made about which locations will be closed but a “substantial majority” will be dine-in restaurants.
NPC said in its release that the arrangement allows for “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.”
The franchisee operates 1,227 Pizza Hut locations and represents 20% of the system’s restaurant based in the United States. According to Pizza Hut, there are still approximately 7,000 stores operating nationwide.
“This deal provides tremendous benefits to NPC and its stakeholders by positioning the NPC Pizza Hut business to drive operational excellence through a streamlined portfolio and allowing for new development to rebuild and modernize Pizza Hut assets in viable trade areas, which will strengthen and benefit the broader Pizza Hut system and its loyal customers,” NPC International said.
Pizza Hut said it will help employees find jobs at nearby Pizza Huts after the 300 locations close. The company said it is moving away from dine-in restaurants and will focus on delivery, curbside and carryout at future locations.
“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,” the pizza chain said. “In the event NPC executes a sale of its Pizza Hut business, Pizza Hut’s focus would be to ensure that new ownership brings to NPC’s Pizza Hut restaurants a strong capital structure, healthy balance sheet, commitment to operational excellence, and a growth mindset.”