The largest franchisee of Pizza Hut restaurants in the US is filing for bankruptcy.
Confirming rumors that had been swirling this week, Kansas-based NPC International said in a statement it has officially filed for bankruptcy and entered a restructuring support agreement with its lenders to “substantially reduce its long-term debt and strengthen the company’s capital structure and potentially participate in a new cash injection after suffering rising commodities costs and a “higher level of financial leverage” for restaurant operator, said Jon Weber, CEO and president of NPC’s Pizza Hut division. According to Bloomberg, the company has $903 million in debt and has pre-negotiated a restructuring agreement with about 90% of its first lien lenders and 17% of second lien lenders.
“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 said in an emailed statement. “We are working with NPC and its lenders to ensure that NPC’s Pizza Hut restaurants emerge from this process with the support they need to succeed.”
Filing for Chapter 11 bankruptcy doesn’t mean Pizza Hut and Wendy’s are going out of business. NPC can keep operating while it works out a plan to pay its bills and turn the business around, and the bankruptcy doesn’t affect the thousands of other Pizza Hut and Wendy’s outlets owned by other franchisees.
According to its website, NPC International currently owns 1,225 Pizza Hut locations, 385 Wendy’s restaurants, has 7,500 full-time employees, about 28,500 part-time workers, operating in 30 states as well as the District of Columbia. It is the largest franchisee of any restaurant concept in the U.S., based on location counts.