NPC International

History

2020: Declaration of bankruptcy

At the beginning of July, 2020 NPC International company, the largest American franchisee of Pizza Hut, declared bankruptcy. The company manages 1225 pizzerias of Pizza Hut and 385 Wendy's restaurants.

It is known that in NPC International company 7500 people occupied full time and about 28,500 people occupied part-time work. NPC International debts during a pandemic grew to $900 million. However the company fought against debts even before crisis, and the coronavirus only aggravated a situation.

The owner of Pizza Hut restaurants declared bankruptcy

In the court documents NPC International it is said that filing of application about bankruptcy was influenced by several factors. The company suffered from gain of the competition which constrained the prices, because of increase in rates of minimum wage in some jurisdictions and increase in prices for beef. Security measures which observance was required during a pandemic cost an average of the companies of $750,000 a month.

Besides, NPC International stated that to bankruptcy the company unsuccessfully tried "construct mutually advantageous partnership" with Pizza Hut and its parent company YUM Brands. Apparently, these measures did not help. Nevertheless, told Yum that "will make everything that in our forces, at this conjuncture" to help the franchisee.

Pizza Hut expressed after this occasion too: "Problem solving of the franchisee as NPC International, and others - indivisible element of our strategy in the USA. In case of some franchisees it means correction of old financial problems, closing of inefficient restaurants or elimination of other barriers which limit their potential for growth".

The NPC International company considers that it could not reach "agreed decision about the perspective business plan" with Pizza Hut and Yum, however added that it maintains "the strong relations" with Wendy's.^[1]

Notes