The closely held company sought Chapter 11 protection in the Southern District of Texas court on Wednesday. NPC, founded in 1962, operates 1,227 Pizza Hut and 393 Wendy’s stores across the U.S., according to
NPC and Pizza Hut have struggled with rising labor and food costs while trying to expand delivery and move away from traditional dine-in restaurants. The Overland Park, Kansas-based company also faces cut-throat competition from rivals such as
The company has $903 million in debt and has pre-negotiated a restructuring agreement with about 90% of its first lien lenders and 17% of second lien lenders. The plan is aimed at reducing the company’s debt, with first lien lenders taking equity and potentially participating in a new cash injection. It also includes the sale of at least part of the company’s restaurants, according to the filing.
The Chapter 11 filing doesn’t mean Pizza Hut and Wendy’s are going out of business. NPC can keep operating while it works out a plan to pay its bills and turn the business around, and the bankruptcy doesn’t affect the thousands of other Pizza Hut and Wendy’s outlets owned by other franchisees.
Under the deal with its lenders, NPC will start trying to sell its Wendy’s restaurants in the coming days. Meanwhile, the company has until July 24 to work out a deal with certain creditors and Pizza Hut itself on how to restructure NPC’s pizza business. If they can’t come to a deal, NPC will try to sell an unspecified number of its Pizza Hut restaurants, according to a
“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 said in an emailed statement. “We are working with NPC and its lenders to ensure that NPC’s Pizza Hut restaurants emerge from this process with the support they need to succeed.”
Ahead of the pandemic, NPC, backed by private investment firm
Restaurants are facing new pressures with the temporary closures of locations across the country to stem the spread of coronavirus. The drain on revenue has been too much for some, causing them to file for bankruptcy protection. Recent filings include
The case is NPC International Inc.,
(Updates with details of restructuring timeline in paragraph six, adding Pizza Hut statement and case number thereafter.)
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