Due to the global COVID-19 pandemic, Wendy’s and Pizza Hut are expected to file for bankruptcy. NPC International, the company that owns both chains, is planning to file for chapter 11 protection.
NPC has stated the reasoning behind this is because customers aren’t coming to the restaurant locations anymore.
It’s hard to imagine such huge and beloved franchises shutting down. After all, NPC owns 1,200 Pizza Hut locations and 365 Wendy’s locations. Many assumed that large chains such as these would be unaffected by COVID-19. So far it’s mostly been the local restaurant businesses that have suffered financially.
However, it appears that not even a commercial giant like NPC International can escape the pandemic’s harsh reality.
At first it seemed like NPC was going to make it through this crisis. From April to May, Pizza Hut and Wendy’s were earning lots of money through takeout and delivery orders. Yum Brands reported that takeout sales were higher than they’d been in eight years. Sadly, this wasn’t enough to make up for the low dine-in sales.
The company missed important loan interest payments that were due earlier in the year, which caused the company’s debt standing to be downgraded.
The Wall Street Journal reported in January that NPC was talking about a “potential bankruptcy”. The company hasn’t officially filed for bankruptcy yet, but it doesn’t look like NPC has much of a chance to come back.