US-based restaurant operator NPC International is reportedly exploring various restructuring options, which include filing bankruptcy.
According to a Bloomberg report, the company is considering several options as decreasing sales have impacted its financial performance.
As a Pizza Hut and Wendy’s franchisee, NPC operates around 1,600 restaurants in the US.
Struggling with around $1bn in debt, NPC is currently negotiating with lenders.
Recently, the restaurant operator defaulted and entered a forbearance agreement with its lenders to gain more time to assess restructuring options.
Sources further told Bloomberg that NPC still aims to work out a restructuring plan out of court to avoid filing bankruptcy. However, NPC did not confirm the move.
Private investment firm Eldridge, which acquired NPC in 2017, declined to comment on Bloomberg’s queries.
Yum! Brands, which offers Pizza Hut licences to franchisees, also declined to confirm the development.
A company spokesperson Virginia Ferguson was quoted by the publication as saying: “While we don’t comment on rumours and speculation or on specific situations with individual franchisees, Pizza Hut US is in constant partnership with our franchisees across the country, including those facing challenges, to make sure we have the healthiest franchise system possible to grow and strengthen the brand.”
According to its website, NPC opened its first Pizza Hut restaurant in 1962.
Today, it operates more than 1,225 Pizza Hut outlets in 27 states and around 385 Wendy’s locations in seven states and Washington, DC.
In the last quarter, same-store sales at NPC’s Pizza Hut locations dropped 2.5%. Its earnings before adjustment were reported to be $16.2m, a 16% drop compared to the same period a year ago.