NPC international Inc. One of the world’s biggest restaurant franchisees has declared bankruptcy. The PITTSBURGH, Kan. based restaurant giant in the US, filed bankruptcy protection even though it had done fairly well in terms of sales in its previous quarter. The franchise had overall done a great job at keeping the sales high as compared to other brands after the pandemic had slowed the whole world down. People familiar with the company’s finances said that it had seen a bump in its sales this quarter. NPC Inc owns about 1200 Pizza hut restaurants and some 385 Wendy’s co-stores. According to various sources, the company was about to file for bankruptcy protection as soon as June 30. The section that it was going to file under was chapter 11, protection, by Tuesday itself.
Other sources have let out the not so secret news that the firm had failed to pay its interest payments on its loan worth $800 million. It was back on January 31, hinting that the franchisee might be looking at some financial issues. It had prompted S&P global ratings and moody’s investors to lower their views on the company’s debt. People who are familiar with the company’s finances and this matter said that the franchise owner had been in conversion with its owners for a possible filing of bankruptcy. Hence this news was not so much of a shocker to them as it was for the general public. When FOX business wrote about this, they hadn’ been able to get in touch with the NPC spokeswoman since she was busy.
However, NPC Inc. is not the only franchisee to claim bankruptcy. Quite a few franchisee chains have declared bankruptcy ever since the COVID 19 pandemic has hit the world. This list includes the parent company to Chuck E cheese and the US part of Le Pain Quotidien. Franchised chains have taken the larger hit during this pandemic because they mostly depend on customers walking into their dining rooms. It has led to a sharp fall in their sales because of the mandatory restaurant closure implemented by the governments.
Although Pizza Hut itself had been struggling before the pandemic hit, it was successfully able to get on track with the new consumer behaviors. Quarantined diners were turned into safe carryout and contactless delivery options. Thus the company and even some of its competitors saw growth in sales even during the pandemic. In fact, in May, Pizza Hut reported its largest numbers in terms of sales in the past eight years. Kansas based company, NPC, opened its very first Pizza Hut franchisee back in 1962. The whole firm employs over 37,000 people. For the past year, the firm had been trying to make various changes like remodeling its units to modernize itself, etc. Now it seems that NPC’s debt load made the company try all these changes to grow its business.