Pizza Hut's Largest U.S. Franchisee with Over 1,200 Locations Files for Bankruptcy

The franchisee operates more than 1,200 Pizza Huts and nearly 400 Wendy's restaurants

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NPC International, the largest Pizza Hut franchisee in the country, filed for Chapter 11 bankruptcy on Wednesday.

Though delivery business has increased recently due to the coronavirus pandemic, Pizza Hut has been struggling for years and NPC currently has a debt burden of nearly $1 billion, CNN reports. The franchisee has more than 1,200 Pizza Huts and nearly 400 Wendy’s restaurants.

The Chapter 11 filing will allow the company to continue to operate and try to turn business around throughout the process.

“While NPC’s Chapter 11 filing was expected, we view it as an opportunity to create a better future for NPC’s Pizza Hut restaurants,” a Pizza Hut spokesperson told CNBC in a statement. “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.”

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NPC joins many other food chains in filing for bankruptcy amid the coronavirus crisis, including Chuck E. Cheese’s parent company, CEC Entertainment, an IHOP franchisee and fast-casual bakery chain Le Pain Quotidien.

CEC Entertainment voluntarily filed for Chapter 11 bankruptcy just last week. CEO David McKillips said in a release that the filing process will allow the company “to strengthen our financial structure as we recover from what has undoubtedly been the most challenging event in our Company's history.”

The Texas-based chain had to close its stores when the pandemic struck, although a number of stores have since been allowed to reopen and will continue to operate throughout the Chapter 11 process.

CFRA Holdings, a franchisee operating 49 IHOP locations, filed for bankruptcy in early May and cited the coronavirus as the primary reason, according to FSR Magazine. All employees working at the closing locations were paid and laid off prior to the bankruptcy filing.

Le Pain Quotidien announced it would close all 98 of its U.S. locations after also filing for Chapter 11 bankruptcy protection in May, though at least 35 stores will potentially be reopened at a future date thanks to a partial buyout by Aurify Brands.

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