Mass Pizza Hut closure fears as franchise with 142 locations files for bankruptcy after owing parent company millions

HUNDREDS of Pizza Hut restaurants are at risk after their parent company filed for bankruptcy.

The filing comes after it was revealed that the parent company, EYM, owes the beloved pizza chain $2.25 million and another $21 million to Manufacturers Bank.

EYM founder - and former McDonald's Mexico president - Eduardo Diaz filed for Chapter 11 bankruptcy on Monday with the Eastern District of Texas.

Diaz filed for bankruptcy protection after the pizza chain sued them for not paying the bills, reports The Daily Mail.

EYM countered that Pizza Hut was to blame for its financial woes, claiming that sales have taken a massive drop.

"In recent years, the best Pizza Hut managed to do is change the cheese in its stuffed crust from mozzarella to cheddar or trot out an occasional, ill-fated appetizer liked the Philly steak melt," EYM said in court documents.

EYM, who started working with Pizza Hut in 2015, said that Pizza Hut failed to keep up with Dominos and Little Caesars.

According to the outlet, sales at US Pizza Huts have dropped 6% compared to 2023.

"Pizza Hut takes pride in being a strong steward of our Franchise System and brand to ensure a best-in-class customer experience in every Pizza Hut branded restaurant, and every action we take is in service of that mission," a spokesperson for the company told the U.S. Sun.

"Following EYM's recent filing, we see opportunity to create a better future for those restaurants and Pizza Hut is working on a transition plan to uphold our brand standards and continue our commitment to serving these communities."

Since the filing, it has been reported the 15 Pizza Hut locations in Indiana and Ohio have been shut down.

Several irate staffers at the affected location have taken to social media claiming they were not given any advanced notice.

According to the workers, the company has told them to file for unemployment.

"The company is working to transition these locations and expects many of them will reopen soon," a Pizza Hut spokesperson said to the Daily Mail.

In addition to the Indiana and Ohio stores, it was revealed that 127 stores across Illinois, Georgia, South Carolina, and Wisconsin are also facing a shutdown.

Pizza Hut revealed that it had told EYM they had set staggered deadlines for the payment for each state.

Pizza Hut locations impacted

The U.S. Sun has compiled a short list of the currently known cities affected by the Pizza Hut closures in Indiana and Ohio.

• Indiana
• 715 N Main Street, Crown Point
• 250 W Ridge Road, Griffith
• 7878 East Ridge Road, Hobart
• 2510 Laporte Avenue, Valparaiso

• Ohio

According to the chain, every time the group missed a payment, they would shut down another store.

Pizza Hut is not the only American chain to have shuttered restaurants.

In May, Red Lobster announced that they had filed for Chapter 11 and would be selling its assets to help restructure the company.

“This restructuring is the best path forward for Red Lobster,” CEO Jonathan Tibus said.

“It allows us to address several financial and operational challenges and emerge stronger and refocused on our growth.”

Applebee's has also suffered through its share of closures.

The closures come as bosses at its parent company Dine Brands warned there would be several shutdowns throughout the year.

Applebee's could suffer a net loss of restaurants ranging between 25 and 35.

TGI Fridays has also been hit hard after being forced to close several locations.

"As we continue along our path of transformation to revitalize the Fridays brand and implement a long-term growth strategy, we see a bright future for TGI Fridays," said Weldon Spangler, CEO of TGI Fridays, earlier this week.

"We are at the helm of a pivotal moment that will allow us to explore boundless advancement, expansion, and innovation to keep delivering 'That Fridays Feeling' that our fans know and love."