(DailyVantage.com) – Pizza fast food chain Pizza Hut is continuing its efforts to streamline its operations, announcing the shuttering of 15 additional locations across the American Midwest region, saying that at least 100 more stores are also running the risk of being closed down.
The company has been undergoing a “strategic transition” for a number of years, leading back to the period before the COVID-19 pandemic, where Yum! Brands, the company that owns Pizza Hut, announced that close to 500 stores would be closed in the next two years. Yum! Brands cited underperformance as the main reason why the locations would be shut down. The company also said at the time that it expects the closure of as many as 7,000 other locations – ostensibly worldwide – within the next year following its 2019 announcement.
The shutdown prompted by the pandemic further exacerbated the situation. Last year, the pizza company was also forced to lay off the entirety of its delivery fleet in California, stating that it could not sustainably comply with the state’s mandatory minimum wage increase.
The closures are also linked to the franchise’s legal dispute with the EYM Group, which owns the vast majority of the stores that will be shuttered. Pizza Hut has accused the EYM Group of failing to fulfill its financial obligations – millions of dollars’ worth of payments due to Pizza Hut. The pizza franchise had given EYM until June to pay the amount it owed. EYM, however, sued Pizza Hut last year, alleging breach of contract, accusing the company of not only failing to modernize and update its menu, but also fall behind in developing a digital ordering system on par with competitors such as Dominos and Little Ceasars.
Pizza Hut filed a countersuit against EYM this month, claiming that the latter violated its franchise agreement by failing to pay its financial obligations.
Aside from the pizza chain, Yum! Brands also owns KFC and Taco Bell.
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