Franchising

1,000 Pizza Hut locations could become competitors' stores

Photo: iStock

September 25, 2020

In the continuing saga of the bankruptcy proceedings of the nation's largest Pizza Hut franchisee, NPC International Inc., comes word that the company's more than 1,000 stores could end up in the hands of the brand's competitors,according to court filings made by the company's lenders as part of NPC's bankruptcy case.

In an objection filed by Pizza Hut late last week, however, the company said buys deemed incapable of maintaining the brand's standards should only lease the physical property rather than actually owning a Pizza Hut franchise.

"The debtors simply cannot avoid the fact that any sale requires Pizza Hut's approval to succeed," the company said in its objection.

Lenders awaiting repayment of debt by NPC, however, disagree saying that would reduce the number of potential buyers. Lenders asserted that the properties should be put on the market and available for acquisition even by Pizza Hut competitors. Lenders cited a 2012 bankruptcy case involving 14 KFC locations that were acquired and changed to Popeyes locations.

The case, filed in July in U.S. Bankruptcy Court for the Southern District of Texas, in Houston, involves more than $900 million in liabilities.