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NPC International, the largest franchisee in the United States for Pizza Hut, filed for Chapter 11 bankruptcy on Wednesday, CNN Business reports. The franchisee also owns almost 400 Wendy’s locations.
The filing was the last resort for NPC, which has been dealing with prolonged restaurant shutdowns due to the coronavirus, struggling business, a debt burden totaling nearly $1 billion, and the growing costs of food and labor. Pizza Hut said through a spokesperson that NPC’s bankruptcy filing “was expected,” and somehow spun that negative news into some truly spectacular positivity by proclaiming that this process will only “strengthen the overall health and performance of the entire system for the long term.”
“As NPC works through this process, we support an outcome resulting in an organization with a lower, more sustainable level of debt, ownership focus on operational experience and a greater level of restaurant investment,” the statement reads.
The filing will allow for NPC to continue overseeing operations in their Pizza Hut locations, while also giving them the opportunity to access how they can get themselves out of their financial hole.
In August, Pizza Hut announced plans to close as many as 500 dine-in locations, specifically seeking out the places that have been underperforming, and transitioning those spots into the company’s long-term vision of a strictly delivery and carryout operation.
NPC becomes the latest company affiliated with a fast food chain to file for bankruptcy, joining Chuck E. Cheese parent company, CEC Entertainment, and CFRA Holdings, which owned 49 IHOP locations. Le Pain Quotidien filed in May, and announced plans to close all 98 U.S. stores, but a partial buyout by Autify Brands will keep less than half of its locations open for business.