NPC International prepares to sell Pizza Hut portfolio and close up to 300 restaurants after reaching agreement with Yum BrandsNPC International prepares to sell Pizza Hut portfolio and close up to 300 restaurants after reaching agreement with Yum Brands

Joanna Fantozzi

NPC International is preparing for the sale of “all of or a portion of” its Pizza Hut business and the closure of up to 300 restaurants after coming to an agreement with Yum Brands Inc. as part of ongoing bankruptcy proceedings, the company said Monday.  

The Leawood, Kan.-based franchise operator is the largest Pizza Hut franchisee with 1,227 restaurants in 27 states, representing about 20% of the pizza chain’s system in the U.S. As NPC International begins the sale process, the agreement with Yum Brands will allow the franchise operation to close up to 300 unprofitable Pizza Hut restaurants, or almost 25% of its total Pizza Hut portfolio, most of which are dine-in restaurants. The locations set to close have not been disclosed. 

“This deal provides tremendous benefits to NPC and its stakeholders by positioning the NPC Pizza Hut business to drive operational excellence through a streamlined portfolio and allowing for new development to rebuild and modernize Pizza Hut assets in viable trade areas, which will strengthen and benefit the broader Pizza Hut system and its loyal customers,” NPC International said in a press release.

“We have continued to work with NPC and its lenders to optimize NPC’s Pizza Hut restaurant footprint and strengthen the portfolio for the future, and today’s joint agreement to close up to 300 NPC Pizza Hut restaurants is an important step toward a healthier business,” Pizza Hut said in a statement. “Closing these restaurants, which significantly underperform the rest of NPC’s Pizza Hut system, will strengthen NPC’s portfolio, resulting in the reallocation of employee resources to thriving locations across the business where possible. Consistent with Pizza Hut’s previously announced transition to a more modern delivery, curbside and carryout-focused asset base, a substantial majority of the NPC Pizza Hut locations to be closed are dine-in locations.”

NPC International and Pizza Hut will try to relocate employees to other Pizza Hut locations, if possible.

The franchise operator was struggling even before the pandemic. NPC filed bankruptcy in July, blaming the pandemic and “dynamic changes due to shifting consumer preferences and dining behavior,” but also higher labor and commodities costs.

NPC International is also a large Wendy's franchisee and the company operates more than 1,600 restaurant franchise locations in total.

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