Pizza Hut Closing Down Several Locations Due to Financial Dispute

In light of an ongoing financial disagreement with one of its key franchisees, Pizza Hut is facing the closure of a large number of outlets.

One hundred fifty restaurants are poised to shutter their doors permanently, while another 129 in the states of Wisconsin, South Carolina, Georgia, and Illinois are on the verge of doing the same.

The sudden closures started in Northwest Indiana, as many Pizza Hut locations shut down.  The Pizza Hut website also listed the stores in Michigan City, Chesterton, Merrillville, Hobart, Crown Point,  Winfield, Lowell, Cedar Lake, Valparaiso,  and Portage as closed.

According to Pizza Hut’s Plano, Texas headquarters, the closures are expected to be temporary. However, they did warn that some stores wouldn’t return.

The problem stems from the fact that Pizza Hut and EYM Group, a company located in Texas that runs many restaurant brands throughout the country, have been in a legal dispute and are experiencing financial difficulties.

As shown in court papers, the franchisee did not pay Pizza Hut the three million dollars due in late 2022 and the two and a half million dollars due in 2023. Due to financial difficulties brought on by inflation, rising labor expenses, and a lack of imaginative thinking, EYM Group is attempting to offload its Pizza Hut locations.

Pizza Hut was sued by EYM Group by a franchisee who claimed the pizza chain had ignored digital and delivery trends and had not invested enough in current business methods.

Claiming sabotage of attempts to sell its fifteen sites in Indiana and violation of contract, Pizza Hut has sued EYM Group.

EYM Group claims that Pizza Hut is hindering its attempts to sell the businesses, for which it paid $8.56 million. If the debts in each state are not paid by the staggered due dates, Pizza Hut will shut down the locations in that state. In August, EYM and Pizza Hut struck a forbearance agreement, which was followed by the lawsuit.

Pizza Hut workers in Indiana were advised to apply for unemployment, and no advance notice of layoffs was provided to them.