Pizza Hut Forced to Close 15 Locations Amid Brutal Battle, Stunning Workers; 129 Other Locations at Risk
Editor’s Note: Our readers responded strongly to this story when it originally ran; we’re reposting it here in case you missed it.
A long-running battle between Pizza Hut and one of its largest franchises has led to the closing of 15 stores, with more closings to come across multiple states.
The first shoe dropped earlier this month when 15 Pizza Hut outlets in Indiana owned by EYM Group closed, according to the Northwest Indiana Times.
The outlet reported that employees posted on social media the closings came with no notice, and that employees were merely told to file for unemployment benefits.
Pizza Hut closes several restaurants in Indiana, Ohio. Pizza Hut’s shuttered Indiana locations are owned by EYM Group, which has been tangled up in a lawsuit against its franchisor. https://t.co/FVVEfE3IA4 pic.twitter.com/SyCCdva14W
— Restaurant News (@NRNonline) June 17, 2024
According to the U.K.’s Daily Mail, another 129 Pizza Hut locations operated by EYM were expected to close in the coming weeks.
Restaurants in Illinois, Georgia, South Carolina and Wisconsin were all on the list of potential closings.
The closings are due to a legal squabble between EYM and Pizza Hut. EYM said Pizza Hut is the reason stores have fallen behind and need updating.
Pizza Hut claims that EYM owes it millions in unpaid franchise fees and other bills. As deadlines for payment pass, the chain closes the stores in that state.
Yum Brands and EYM Group are in a legal battle over unpaid franchise fees leading to sudden closure of 15 Pizza Hut locations, with 129 more at risk. The heart of the dispute lies in the failure of Pizza Hut to keep up with its competitors and deliver a… https://t.co/cQjP5e5QNL
— The America One News (@am1_news) June 18, 2024
“This is Pizza Hut bosses showing they are not bluffing,” the Daily Mail quoted what it called an insider as saying.
South Carolina Pizza Huts had a deadline of June 27, followed by a July 7 deadline for outlets in Illinois, a July 11 deadline in Georgia and a Sept. 5 deadline in Wisconsin.
EYM Group had sued Pizza Hut in March claiming the company violated its contract.
It had sought a preliminary injunction that would prevent Pizza Hut from terminating EYM’s ability to operate its restaurants but was unsuccessful, according to court records.
According to Nation’s Restaurant News, Pizza Hut said in a statement, “While some local franchisee-operated restaurants have temporarily closed, Pizza Hut remains committed to providing outstanding service and products to our valued customers.”
“The company is working to transition these locations and expects many of them will reopen soon,” Pizza Hut said in its statement.
Yum! Brands, the parent of Pizza Hut, reported last month that same-store sales dropped 7 percent in the last quarter, according to the New York Post.
Same-store Pizza Hut sales in the U.S. fell 6 percent in the last quarter. Sales had risen 7 percent in the same quarter last year.
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