Nearly 130 Pizza Hut locations may be forced to close following a dispute between the national pizza chain and one of its franchisees. In July, franchisee EYM Group filed for bankruptcy just days after the abrupt closure of 15 locations in Indiana and Ohio.
EYM Group sued Pizza Hut, blaming the company for its struggles. In a since-dismissed lawsuit, EYM Group argued Pizza Hut and its parent company, Yum Brands Inc., failed to innovate and keep up with its competitors.
In a separate lawsuit, Pizza Hut is seeking to recoup the $2.25 million owed by EYM Group. The francisee also owes $21 million to Manufacturers Bank.
Now, EYM Group has put 127 Pizza Hut locations across the midwest and southern United States up for sale, leaving their fate in limbo as the process plays out. However, Alan Gallup, lead adviser for the National Franchise Sales Asset Recovery Team, believes the restaurants could find buyers who will turn them around.
“The stores were shaken a little bit in terms of top-line sales over the summer, given the issues between the franchisee and franchisor,” Gallup said, according to Franchise Times. He noted that Pizza Hut “is in an attractive segment” and expects “we’re going to see a lot of interest, and there’s money to be made in these restaurants.”
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