Pizza Hut Shutters 15 Locations, Dozens Of Others In Danger As Restaurant Economy Struggles

Pizza Hut shuttered 15 locations in Indiana on Friday while more than 120 additional locations are in danger of closing, according to a report from The Times of Northwest Indiana.

The latest closures come after a long-running dispute between the chain and 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 owed to Pizza Hut by a June deadline.

EYM has accused Pizza Hut of failing to modernize its menu as well as its digital ordering system. This, the franchisee claims, is putting the company at a significant disadvantage, including against director competitors like Dominos and Little Caesars, at a time when restaurants are struggling to make a profit.

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EYM Group filed suit against Pizza Hut in March 2023 over an alleged breach of contract. Pizza Hut opened a counter lawsuit earlier this month in which they likewise accused the group of breach of contract over alleged financial discrepancies that made it unable to make payments, which is required by the franchise agreement.

After a number of defaults, Pizza Hut entered into a forbearance agreement with the franchisee last year.

Pizza Hut’s parent company, Yum Brands, recently reported that same-store sales at Pizza Hut declined by 7 percent last quarter.

The latest closures follow a trend of sit-down restaurants closing nationwide. Major chains such as Applebees, Dennys, Cracker Barrel and more have closed hundreds of locations due to rising costs and declines in sales as consumers struggle with inflation.