IRVING, Texas — Read this story and more North Texas business news from our content partners at the Dallas Business Journal
An Irving-based franchise operator of more than 130 Pizza Hut restaurants filed this week for bankruptcy protection, a fresh challenge for the restaurant chain based in Plano.
Franchisee EYM Pizza LP filed for Chapter 11 bankruptcy protection on July 22 in the Eastern District of Texas.
The filing listed creditors including Los Angeles-based Manufacturers Bank, a state-chartered commercial bank, and Pizza Hut LLC. EYM Pizza owes the bank more than $20 million and owes Pizza Hut $2.2 million, according to the filing.
EYM Pizza did not list estimated assets or liabilities in the initial filing.
EYM Pizza did not immediately respond to Dallas Business Journal’s request for comment. Neither did Pizza Hut. EYM is being represented by Howard Marc Spector of Dallas-based Spector & Cox PLLC, who declined to comment.
The Chapter 11 filing by EYM, one of Pizza Hut's largest franchisees, follows lawsuits between the franchisor and franchisee.
EYM, which operates about 140 Pizza Hut locations in Wisconsin, Illinois, Indiana, Georgia and South Carolina, filed a breach of contract lawsuit in March alleging Pizza Hut breached its fiduciary duty by failing to remain competitive, according to Restaurant Dive. That case was later dismissed.
Pizza Hut, a subsidiary of Plano-based Yum Brands, then sued EYM for not paying royalties on time despite a forbearance period granted to EYM in 2023 and wrapped up in February. In Pizza Hut’s countersuit in June, the company said EYM is among its largest franchisees but is one of the worst performing. Restaurant Dive reported Pizza Hut is working to transition EYM’s locations to different owners.
The Plano-based pizza giant has struggled with rising labor and food costs that hit on the heels of Covid-related shutdowns taking a heavy toll on the restaurant industry.
EYM's bankruptcy filing is the most recent but not the biggest since the pandemic hit.
Overland Park, Kansas-based NPC International Inc., formerly the largest franchisee of Pizza Hut restaurants in the U.S., sought Chapter 11 protection in June 2020 in the Southern District of Texas. NPC International operated more than 1,200 Pizza Hut locations at the time of the filing. In January 2021, a bankruptcy judge approved the sale of NPC's Pizza Hut and Wendy's restaurants for around $800 million
Pizza Hut operates roughly 6,500 locations in the U.S., down from about 7,300 in 2019, according to Restaurant Business Magazine.
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