NPC International Inc., one of the nation’s largest franchise operations, is reportedly preparing to file for bankruptcy protection, according to The Wall Street Journal.
The Kansas-based company operated 1,229 Pizza Hut locations and 393 Wendy’s at the end of fiscal 2019. The report indicated NPC could file for Chapter 11 reorganization as soon as Tuesday, citing unnamed sources.
NPC officials did not immediately respond to requests for comment.
There were signs of trouble even before the pandemic, according to the report. NPC missed interest payments on its nearly $800 million in loans on Jan. 31, prompting S&P Global Ratings and Moody’s Investor Service to lower their view on company debt. The report also said NPC has been in conversations with lenders about a possible bankruptcy for some time.
The Pizza Hut brand, meanwhile, in early May recorded its highest delivery and carryout average sales week average in eight years in the U.S., Yum Brands reported in mid-June.
Delivery and carryout-focused restaurants reported 15% sales growth, quarter-to-date, the Louisville, Ky.-based company said.
NPC, for its 53-week fiscal 2019, reported U.S. foodservice revenue, including restaurant sales and delivery fees, of $1.6 billion, up 4.3% from its 52-week fiscal 2018 revenue of $1.5 billion, according to Nation’s Restaurant News Top 200 data.
NPC joins a growing number of restaurant chains considering reorganization, including Chuck E. Cheese parent CEC Entertainment, the U.S. arm of Le Pain Quotidien, IHOP franchisee CFRA Holdings, and Bravo and Brio owner FoodFirst Global Restaurants.
Contact Lisa Jennings at [email protected]
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