Pizza Hut has abruptly shuttered 15 locations in the Midwest with more than 120 others at risk of closing down after the chain landed in a bitter legal dispute with a franchisee.
EYM Group, which owns and operates 142 Pizza Hut locations in Illinois, Indiana, Georgia, South Carolina and Wisconsin, was accused of defaulting on millions of dollars in payments that were allegedly owed to Pizza Hut by a June deadline.
Pizza Hut abruptly moved to shutter 15 restaurants in Northwest Indiana on Friday, according to a report in The Times of Northwest Indiana.
The Times of Northwest Indiana cited social media posts by employees.
EYM has accused Pizza Hut of failing to modernize its menu as well as its digital ordering system — thus putting it at a disadvantage against the stiff competition in casual dining, including from Little Caesars and Domino’s.
EYM Group filed suit against Pizza Hut in March 2023, alleging a breach of contract.
Pizza Hut countersued earlier this month, alleging that EYM Group was beset by financial discrepancies and that it failed to make required payments — thus violating the franchise agreement.
After several defaults, Pizza Hut entered into a forbearance agreement with the franchisee last year.
The Post has sought comment from Pizza Hut and EYM Group.
Pizza Hut’s parent company, Yum Brands, reported last month that same-store sales at Pizza Hut declined by 7% in its most recent quarter.
In the US, Pizza Hut same-store sales dropped 6% — a stark decline compared to 7% same-store sales growth during the same period last year.
Shares of Yum Brands, whose subsidiaries include Kentucky Fried Chicken and Taco Bell, are up nearly 6% from Jan. 1.
