Wendy’s franchisee Pizza Hut files for bankruptcy

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PITTSBURG, Kan. — NPC International Inc., one of the largest restaurant franchisees in the United States, has filed for bankruptcy despite its brands reporting increased sales since the coronavirus pandemic, said people familiar with the matter.

The owner of more than 1,200 Pizza Hut restaurants and 385 Wendy’s Co. stores was due to file for Chapter 11 protection as early as Tuesday, June 30, according to people familiar with the company’s finances.

The franchisee failed to pay interest on its nearly $800 million loans on Jan. 31, prompting S&P Global Ratings and Moody’s Investors Service to downgrade their views on the company’s debt. NPC was in talks with its lenders for a possible bankruptcy filing at the time, people familiar with the matter said.

A spokeswoman for the NPC was not immediately available for comment to FOX Business.

A number of franchise restaurants have declared bankruptcy since the pandemic, including the parent company of Chuck E. Cheese and the American division of the Le Pain Quotidien bakery chain. Franchise chains are largely dependent on customers entering their dining rooms and have faced a slump in sales due to mandatory restaurant closings.

Pizza Hut was struggling before the pandemic in the United States, but has proven to be one of the winners in changing consumer behavior during the virus. Quarantined diners have turned to delivery and delivery to eat safely, with a number of pizza chains reporting growth.

In early May, Pizza Hut recorded its highest average U.S. delivery and takeout sales in the past eight years, according to parent company Yum Brands Inc. Same-store sales increased in late April teens at the end of May, the company said.

Kansas-based NPC, which opened its first Pizza Hut restaurant in 1962, employs more than 37,000 people.

But NPC’s indebtedness has weighed on the company’s outlook for more than a year now. The company has spent renovating its units, which a growing number of chains have asked franchisees to do to modernize their brands.

To learn more, visit FOXBusiness.com.

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