Major Restaurant Chain Abruptly Closes 15 Outlets; 129 Others Face Immediate Shutdown Amid Escalating Crisis

By: Georgia | Published: Jun 18, 2024

Out of nowhere, 15 Pizza Hut restaurants in Indiana locked up their doors last Friday, surprising not just the patrons but also the employees. 

According to DailyMail.com, this sudden decision stems from a deepening financial tiff with EYM Group, a key franchisee. The unresolved money matters between Pizza Hut and EYM Group triggered these closures.

Financial Feud Threatens More Locations

The spat isn’t just a local issue—129 more Pizza Hut outlets across Illinois, Georgia, South Carolina, and Wisconsin are teetering on the edge of closure. 

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Close-up view of a freshly baked Pizza Hut cheese pizza with golden cheese and a thick crust

Source: Pizza Hut/Facebook

The financial discord has reached a boiling point, threatening the stability of the franchise relationship.

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Employees Caught Off-Guard by Closures

When the doors shut abruptly, the staff at these Indiana locations were left in the lurch, without any forewarning

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Two white delivery scooters branded with Pizza Hut logos, equipped with rear cargo boxes advertising the Ice Cream Factory

Source: Pizza Hut/Facebook

The word spread quickly on social media as former employees shared their sudden plight and urged others to seek unemployment benefits.

Hints at Future Reopenings

“There is hope on the horizon,” hinted a Pizza Hut spokesperson, saying, “The company is working to transition these locations and expects many of them will reopen soon.” 

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An older style Pizza Hut restaurant with a distinctive red roof and the logo on a signpost

Source: Wikimedia Commons

This suggests plans are underway to possibly refurbish and relaunch these stores under new management or ownership.

EYM Group Points Fingers at Pizza Hut

In a turn of events, EYM Group blames Pizza Hut for falling behind in the fast-food race, failing to refresh its menu and technology, which they believe has hurt their sales significantly. 

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A modern Pizza Hut store located in a tropical area with a scooter parked in front, surrounded by trees and a clear blue sky

Source: Wikimedia Commons

They argue this has disadvantaged them against giants like Domino’s and Little Caesar’s, according to DailyMail.com.

Downturn in Pizza Hut's National Sales

It’s been a rough year for Pizza Hut, witnessing a 6% drop in sales across its U.S. stores compared to last year. 

A close-up of a Pizza Hut pizza topped with chicken popcorn pieces, melted cheese, and dusted with seasoning

Source: Pizza Hut/Facebook

This slump reflects larger challenges within the company as it grapples with keeping up in a fiercely competitive market.

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Quick Closures Post-Deadline

“The Pizza Hut bosses are showing they mean business,” an insider explained after the Indiana stores were promptly shut down following a missed payment deadline by EYM Group. 

A casual indoor setting with two open Pizza Hut boxes on a patterned quilt, featuring a variety of pizzas and side dishes

Source: Pizza Hut/Facebook

It’s clear that financial deadlines are being taken seriously, with immediate consequences.

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EYM Group’s Legal Stand Against Pizza Hut

In a bold move, EYM Group has sued Pizza Hut, claiming a breach of contract. 

Interior view of a Pizza Hut Express featuring a red and white decor, with a menu display above the counter and several dining tables set for customers

Source: Wikimedia Commons

They allege that the pizza chain hasn’t lived up to their end of the bargain, particularly failing to stay competitive, which they say has negatively impacted their operations.

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Flak Over Pizza Hut’s Strategy

EYM Group has openly criticized Pizza Hut’s recent strategies, particularly their menu and technological updates, which they say haven’t resonated well with customers. 

Exterior view of a traditional Pizza Hut restaurant at sunset, showcasing its iconic red roof and signpost advertising a family night special

Source: Wikimedia Commons

They pointed to unenthusiastic responses to changes like swapping mozzarella for cheddar in the stuffed crusts.

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Rising Costs Add to Financial Woes

Amid the ongoing dispute, EYM is also grappling with rising costs for ingredients, exacerbated by inflation, which is eating into their profit margins significantly. 

A close-up of a Pizza Hut vegetable supreme pizza in its box, topped with colorful bell peppers, onions, mushrooms, and melted cheese

Source: Pizza Hut/Facebook

This financial strain is occurring alongside the friction with Pizza Hut, making it a tough year for the franchisee.

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Pizza Hut’s Legal Countermove

On June 7, Pizza Hut responded with its own lawsuit filed in Texas, accusing EYM Group of contract violations and detailing plans to assume control of the indebted restaurants. 

A detailed image of a Pizza Hut specialty pizza featuring a stuffed crust, topped with various meats, vegetables, and a generous amount of cheese

Source: Pizza Hut/Facebook

Court documents point to millions in unpaid dues by EYM, highlighting severe financial mismanagement.

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Reflecting on Pizza Hut’s Franchise Model

The ongoing debacle with EYM Group sheds light on broader systemic issues within Pizza Hut’s franchise model. 

A busy Pizza Hut counter located in a shopping mall, staffed by employees in red uniforms, serving customers and displaying an array of pizza options

Source: Wikimedia Commons

With thousands of locations nationwide, the outcomes of these disputes will not only affect immediate stakeholders but could also influence how Pizza Hut is perceived and operates in the competitive landscape of the fast-food industry.

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