Major Franchisee With More Than 1,500 Wendy's and Pizza Hut Locations Files for Bankruptcy

Major Franchisee With More Than 1,500 Wendy's and Pizza Hut Locations Files for Bankruptcy

NPC International, the operator of 1,200 Pizza Hut and nearly 400 Wendy's restaurants in the United States, has filed for bankruptcy, according to the company.

“NPC International, Inc. is the largest franchisee of any restaurant concept in the U.S., based on unit count, and the fifth-largest restaurant unit operator, based on unit count, in the U.S. The Company..has a total of approximately 7,500 full-time employees and approximately 28,500 part-time employees, and operates in 30 states and District of Columbia,” said the company.

The company has been dealing with multiple challenges that forced it to its Chapter 11 filing on Wednesday, including coronavirus-related shutdowns, a massive debt burden of nearly $1 billion and rising labor and food costs. Pizza Hut, of which NPC is the company's largest franchisee, has also been struggling with sales recently.

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“As our industry has been in the midst of dynamic changes due to shifting consumer preferences and dining behavior, we also have been facing increased labor and commodities costs and a higher level of financial leverage that presents obstacles to achieving our long-term business objectives,” said Jon Weber, CEO & President of NPC’s Pizza Hut division.

“These challenges have been magnified recently by the impact and uncertainty of COVID-19, and we believe it is necessary to take proactive steps to strengthen our capital structure, so we have the financial flexibility to continue to adapt to current industry trends. We also intend to use this process to continue to evaluate and optimize our restaurant portfolio so that we are best positioned to meet the needs of consumers across the country,” added Weber.

"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," a Pizza Hut spokesperson told CNN. The company added that filing will "strengthen the overall health and performance of the entire system for the long term."