The largest fast-food franchisee in America, which owns 1,600 Pizza Hut and Wendy's locations, files for bankruptcy
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The largest franchisee in the US filed for bankruptcy.
On Wednesday, NPC International — a company that owns and operates more than 1,200 Pizza Hut and nearly 400 Wendy's restaurants — filed for Chapter 11 protection in the Texas Southern Bankruptcy Court.
NPC has struggled financially in recent years, in large part because of the performance of its 1,227 Pizza Hut restaurants, which make up about 20% of all of the chain's US locations, according to the company's filing. Pizza Hut has struggled to grow same-store sales across the system, as rivals such as Domino's and Papa John's have thrived.The coronavirus pandemic "unexpectedly provided some relief" for NPC, as Wendy's offered
"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 excellence and a greater level of restaurant investment," the statement said. "These changes will help NPC's Pizza Hut restaurants generate the same momentum we are seeing throughout the Pizza Hut US business and strengthen the overall health and performance of the entire system for the long term."
While chains have been better positioned during the coronavirus pandemic than independent restaurants, they have also been hit hard as people radically change their eating habits.
Chains including Starbucks, IHOP, and Denny's have announced plans to close more than 900 locations because of the pandemic, Business Insider's Irene Jiang reported. Numerous individual franchisees have filed for bankruptcy as restaurants' sales plummet."Every franchisee is a small business, and they had to close up, and they're sucking wind," Roger Lipton, a restaurant-industry investor, told Business Insider in May. "They're hemorrhaging."
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