The Most Famous Pizza Chain Announces Many Closures in the United States

The pizza chain Pizza Hut has been hit by the economic crisis affecting many franchises in the United States. Its operator, EYM Pizza L.P., sold 77 locations in a bankruptcy auction. Before its financial troubles, the company managed 142 restaurants of the brand.

According to The Street, the company filed for Chapter 11 bankruptcy in July 2024. Despite restructuring attempts, it chose to sell a large part of its establishments to pay its debts.

Closure of Restaurants and Buyers

Several companies acquired EYM Pizza's locations in an auction. Among the buyers are Pizza Hut LLC, which took over 18 locations, and other companies like PZH Foods, Valor Pizza, and KK Management. The sales covered establishments in Georgia, Illinois, South Carolina, and Wisconsin.

Despite these transactions, 50 locations will close permanently because they didn't find a buyer. Before declaring bankruptcy, EYM Pizza had already closed 15 branches in Indiana and Ohio in July 2024.

To manage the sale of its franchises, the operator hired National Franchise Sales, a firm specialized in business brokerage.

The Impact of the Crisis on the Pizza Industry

Since 2020, the restaurant industry has faced economic difficulties. The pandemic reduced customer traffic and skyrocketed operating costs. Many chains have had to close locations or declare bankruptcy.

According to The Daily Mail, six pizza chains faced financial problems in 2024. Next Level Pizza Inc., owner of Oath Pizza, liquidated its assets in October. Mary's Pizza Shack, based in California, began its restructuring in September.

Other cases include Fired Pie, in Phoenix, which resorted to Chapter 11, and Nick's Pizza & Pub, in Illinois. It filed for protection for the second time in December.

Debts and Conflict with Pizza Hut

Before its bankruptcy, EYM Pizza accumulated large debts. Among its main creditors are Manufacturer's Bank, to which it owes $21.6 million, and Pizza Hut LLC, with a debt of $2.2 million.

The financial problems were exacerbated by a legal dispute with Pizza Hut LLC. The parent company sued its franchisee for stopping royalty payments after a grace period ended.

Meanwhile, EYM Pizza sued Pizza Hut for alleged breach of fiduciary duty, but the judge dismissed the case.

The Future of EYM Group and Pizza Hut

EYM Pizza is part of EYM Group, a company that also manages franchises of Denny's and Panera Bread. In the past, it operated KFC locations but no longer appears as a franchisee of that brand.

Founded in 2008 by Eduardo Díaz, former president of McDonald's Mexico, the company began its relationship with Pizza Hut in 2015.

Meanwhile, Pizza Hut LLC, with more than 6,700 locations in the U.S., has confirmed the closure of several franchises. However, it hasn't disclosed the exact number of affected restaurants.

Despite the crisis, the chain continues to operate and maintains its presence in the market.