The company behind 1,200 Pizza Hut locations and nearly 400 Wendy's restaurants across the U.S. has filed for bankruptcy. NPC International filed for Chapter 11 on Wednesday, which follows a massive financial hit following widespread shutdowns aimed to slow the spread of coronavirus.
However, as CNN pointed out, the company was nearly $1 billion in debt before the shutdown while facing the costs of both labor and food rising. A spokesperson for the pizza chain said that they'd anticipated the filing, and are remaining supportive of their franchisee. "As NPC works through this process, we support an outcome resulting in an organization with a lower, more sustainable level of debt, ownership focus on operational excellence and a greater level of restaurant investment," the spokesperson said. They added that the filing would "strengthen the overall health and performance of the entire system for the long term."
Jon Weber, the CEO of NPC's Pizza Hut division, also issued a statement about the filing, saying the company will "evaluate and optimize our restaurant portfolio so that we are best positioned to meet the needs of consumers across the country." Its stake in Wendy's restaurants isn't quite as vast, accounting for just over six percent of nationwide locations.
NPC operates only a small portion of Wendy's roughly 6,500 US restaurants. A spokesperson for the burger chain also told the outlet that NPC's restaurants were "generally performing very well" and were in good standing overall. "We expect that NPC will continue to be a productive member of the Wendy's family, and we will continue to stay closely coordinated and support them moving forward."
NPC International's filing is just the latest in a growing list of companies that have filed for bankruptcy — and citing the coronavirus pandemic as the primary cause. The kid-friendly pizza place/arcade Chuck E. Cheese also filed for Chapter 11 back in June, despite its efforts to rebrand itself as Pasqually's during the initial coronavirus quarantine.
Hertz, the second-largest car rental company in the country, also filed for bankruptcy back in May. Despite boasting 77,000 cars in its fleet, the company doesn't own the automobiles outright but instead leases them through several different financing subsidiaries. The company had been missing payments on several leases in April and carried a debt burden of roughly $19 billion, as well.