Written by Ashton Snyder on
 June 19, 2024

Pizza Hut Shutters 15 Locations with Threat of More to Follow

According to Daily Mail, Pizza Hut has suddenly closed 15 stores and may close an additional 129 due to a significant dispute with a major franchisee.

Nearly 150 Pizza Hut locations are slated for closure following a financial dispute involving unpaid bills totaling millions of dollars between Pizza Hut and EYM Group, leading to mutual lawsuits.

On Friday night, patrons of 15 Pizza Hut locations in Indiana were met with abrupt closures, marking the debut of nearly 150 such impending shutdowns. A missed payment deadline during the past week spurred these initial closures. EYM Group, which operates these restaurants, has yet to reconcile millions in unpaid funds, exacerbating the conflict with Pizza Hut.

Additional States at Risk of Closures

Amid this conflict, another 129 locations spread across Illinois, Georgia, South Carolina, and Wisconsin now face similar threats. EYM Group’s operations span 144 Pizza Hut outlets within five states, making the stakes in this dispute particularly high.

Dates for staggered payment deadlines were set by Pizza Hut, with each state having its own schedule. Indiana's restaurants faced closure after missing the June 12 deadline, with the shutdown on June 14. South Carolina's deadline is June 27, while Illinois faces its own on July 7, Georgia on July 11, and Wisconsin on September 5.

Both corporations have taken legal action against each other, citing breach of contract among various other grievances. In March, EYM Group sought legal recourse, accusing Pizza Hut of failing to modernize its menus and applications, leading to a competitive disadvantage and financial strain. The group also highlighted inflation and rising ingredient costs as contributing factors. Pizza Hut responded with its legal suit on June 7, seeking to take control of the outlets should EYM Group fail to cover its debts.

Financial Struggles and Employee Impact

The financial entanglement sees EYM Group defaulting on over $5.6 million between late 2022 and 2023. Kevin Hochman, their CEO, alleged that Pizza Hut's negligible innovations, such as tweaking cheese types in their stuffed crust or temporary appetizers, contributed to declining sales.

Indeed, Pizza Hut's U.S. sales have dipped by 6% this year, contributing to the acrimonious situation. Meanwhile, employees at the closed Indiana locations were blindsided and advised to file for unemployment, further illustrating the abruptness and severity of these closures.

In an attempt to mitigate the situation, Pizza Hut hopes to transition these locations, expecting many will eventually reopen. A Pizza Hut spokesperson commented, "The company is working to transition these locations and expects many of them will reopen soon."

Legal Battle and Future Prospects

EYM Group, founded in 2008, has faced escalating issues with Pizza Hut over the last year. In an attempt to address mounting dues, Pizza Hut previously granted EYM a forbearance on debt repayment last August. However, tensions resurfaced, with EYM's operations deemed at risk should there be continuous missed payments.

Notably, a source disclosed to DailyMail.com the strategy behind these shutdowns: "This is Pizza Hut bosses showing they are not bluffing." Pizza Hut, owned by Yum Brands Inc., outlined its intention to seize control of the outlets should unpaid debts persist, intensifying the pressure on EYM Group to navigate its financial burdens.

The immediate aftermath of the Indiana closures reveals the tangible effects on the broader workforce and local economies. As other states approach their respective deadlines, anticipation builds regarding potential closures and the employees' fate.

Conclusion

Nearly 150 Pizza Hut locations face potential closures due to unpaid bills between Pizza Hut and EYM Group, including 15 outlets in Indiana. With additional locations in Illinois, Georgia, South Carolina, and Wisconsin under similar threat, EYM Group’s financial struggles and legal issues compound the situation. This dispute underscores broader challenges, including anticipated job losses and diminishing sales figures, further complicating an already volatile scenario.

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About Ashton Snyder

Independent conservative news without a leftist agenda.
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