One of the Largest Pizza Hut Franchisees Sells All Remaining Stores Post Bankruptcy

One of the largest Pizza Hut franchisees has announced that it will be selling off all of its remaining stores following a Chapter 11 bankruptcy filing.

Nation’s Restaurant News reports that as part of a financial reorganization process, EYM Pizza LP is selling all 127 of its locations in Illinois, Indiana, Georgia, South Carolina, and Wisconsin.

To expedite the sale and provide support in the asset recovery process to optimize recovery for creditors, EYM enlisted the services of M&A consultancy and brokerage firm National Franchise Sales. In its bankruptcy filing, EYM named two creditors: Pizza Hut, to which it owes a little less than $2.25 million, and Manufacturers Bank, to which it owes over $21 million.

“National Franchise Sales is dedicated to navigating this challenging period with EYM Pizza L.P. and its affiliates. Our goal is to ensure a smooth transition and maximize value for all parties impacted by this process,” NFS Asset Recovery Team lead advisor Alan Gallup said in a statement to the outlet.

Pizza Hut Franchisee Filed for Bankruptcy in July

EYM Pizza LP and associated companies filed for bankruptcy in the Eastern District of Texas on July 22. Two creditors are listed in the bankruptcy case, along with related companies located in Wisconsin and Indiana.

Despite the fact that a forbearance period that had been permitted earlier in the year had ended in February, Pizza Hut sued EYM Group in June for mismanagement and late royalty payments. This lawsuit stems from a previous legal issue that started when EYM sued Pizza Hut for many reasons, including a contract breach.

Eduardo Diaz, a former president of McDonald’s Mexico, established EYM in 2008. After operating Pizza Hut restaurants since 2015, the business shut down over 15 locations across Northwest Indiana before filing for bankruptcy.

Regarding the closures, a Pizza Hut spokesperson said, “While some local franchisee-operated restaurants have temporarily closed, Pizza Hut remains committed to providing outstanding service and products to our valued customers. The company is working to transition these locations and expects many of them will reopen soon.”

However, employees from the closed locations posted on social media to say they were “let go and told to file for unemployment.” They explained that the “closures affected all Indiana locations owned by EYM Group.”