Another Fast Food Chain Is in Serious Trouble

 

Another Fast Food Chain Is in Serious Trouble – Stephen Green    . . ."EYM Group owns and operates 144 Pizza Hut locations in Indiana, Illinois, Georgia, South Carolina, and Wisconsin but owes millions in franchise fees to Yum Brands. All the Indiana locations were boarded up on Friday of last week, and the Daily Mail reported today that the remaining 129 restaurants "across Illinois, Georgia, South Carolina and Wisconsin are on the brink of shutting as part of the dispute."

"How EYM and Yum Brands got here is one of those stories they'll tell for years to business masters students as a lesson on What Not to Do.

"Based in Texas, EYM ended up owing millions to Yum for a number of reasons, including inflation jacking up food costs faster than EYM could boost prices on increasingly cost-conscious diners. But Pizza Hut's problems run back much further than Bidenflation. 

"Yum was showing patience with EYM, giving them extra time to pay their overdue franchise fees. But EYM sued corporate last March for breach of contract — basically, for failing to deliver a competitive product for franchisees to sell. According to the suit, Pizza Hut has "not kept up with the heavy competition from its competitors, Dominos, Little Caesars."

"Another complaint was that "In recent years, the best Pizza Hut managed to do is change the cheese in its stuffed crust from mozzarella to cheddar or trot out an occasional, ill-fated appetizer liked the Philly steak melt."

"Yum countersued EYM earlier this month. And for its part, Pizza Hut said, "The company is working to transition these locations and expects many of them will reopen soon," and claims they'll do the same if and when the other 139 EYM restaurants close.

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