PITTSBURG, Kan. — NPC International, Inc., America’s largest Pizza Hut franchisee, which started with O. Gene Bicknell opening his first Pizza Hut in Pittsburg more than half a century ago, filed for Chapter 11 bankruptcy on Wednesday.
In addition to more than 1,200 Pizza Hut locations, NPC today operates nearly 400 Wendy’s restaurants in 30 states and Washington, D.C. While the company is now headquartered in Leawood, Kansas, it still has a shared services center located in Pittsburg, and employs a total of approximately 7,500 full time employees and approximately 28,500 part time employees nationwide — who will not be laid off as a result of the bankruptcy filing, according to an NPC press release.
“NPC has filed several customary ‘First Day’ motions with the Court, which are intended to ensure that the Company is able to maintain operations in the ordinary course and facilitate a smooth transition into Chapter 11,” according to a press release. “Among these is a motion to continue providing wages, salaries and benefits to all NPC employees without change or interruption, and NPC does not expect there to be any changes to employees’ day-to-day job responsibilities or work schedules.”
Jon Weber, CEO & President of NPC’s Pizza Hut division, said in a press release that the company wanted to thank its employees for their hard work and dedication.
“The quality of our team is one of our company’s greatest strengths, and it is a big part of what gives us confidence about the future,” Weber said. “We believe that by reducing our debt level and improving our capital structure, we will create a stronger future.”
NPC has struggled with a debt burden of approximately $1 billion, while Pizza Hut, which is owned by Yum! Brands, has seen decreasing sales in recent years, despite doing better than many companies during the coronavirus pandemic due to increased online and delivery sales.
“The Pizza Hut brand has in recent years faced a deteriorating brand image in light of the pervasiveness of pizza restaurants, the success of competing brands to carve out a particular market within the pizza industry, and the reluctance by the Pizza Hut Franchisor to invest in brand development,” NPC noted in its bankruptcy filing. “The Pizza Hut brand continues year after year to lose market share to its national competitors.”
The filing also cited Pizza Hut’s “decreased menu innovation and the lack of a clear, long-term strategy” in comparison to the evolving business models of competitors such as Domino’s and Papa John’s.
“While NPC’s Chapter 11 filing was expected, we view it as an opportunity to create a better future for NPC’s Pizza Hut restaurants,” a Pizza Hut spokesperson reportedly said. “As NPC works through this process, we support an outcome resulting in an organization with a lower, more sustainable level of debt, ownership focus on operational excellence and a greater level of restaurant investment.”
Wendy’s has also commented on the bankruptcy filing.
“We expect that NPC will continue to be a productive member of the Wendy's family, and we will continue to stay closely coordinated and support them moving forward," the chain reportedly said.
NPC is “very pleased with the support” it is receiving from senior leaders on the Wendy’s side of the business, according to Carl Hauch, CEO & President of NPC’s Wendy’s division, in a statement on the company website.
“The Wendy’s business remains strong and resilient and is already recovering from the impact of the pandemic to produce year-over-year growth,” Hauch said. “We look forward to continuing our discussions with our brand partners, landlords and other creditor groups and are confident that we will be able to work collaboratively to agree on a long-term plan that is in the best interests of all stakeholders.”