Another Fast Food Chain Is in Serious Trouble

[PeteS in CA]

Another Fast Food Chain Is in Serious Trouble

https://pjmedia.com/vodkapundit/2024/06/18/another-fast-food-chain-is-in-serious-trouble-n4929963

A major Pizza Hut franchisee just closed 15 locations without warning, and nearly 130 might go dark for good in an ongoing battle with the struggling brand owner.

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."
...
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."
...
Pizza Hut went from being a fast-casual dine-in chain to competing with low-cost delivery joints like Little Ceasar's. Then they started opening weird dual-use take-out/delivery locations with other Yum brands like Taco Bell and KFC.

Pizza (the) Hut's woes probably go back more than 20 years. Putting it simply, they don't seem to have decided what they wanted to be and worked to optimize that. There used to be multiple PH locations about Silicon Valley, including one less than 5 minutes' drive from my home. Most are now gone. "Dual use" fast food stores can work well, but PH didn't seem to make it work. PH also, for quite a few years in my area, had mini-restaurants in Target stores, but those are gone, many replaced by Starchucks-by-Target mini-stores. I won't claim EYM has been perfect - I don't know - but it looks like PH has bleeped over franchisees through PH's identity crisis.

[libertybele]

I didn't even realize that Pizza Hut had shops open.  Ours closed down about 15 years ago. I was never a fan, but I hate to see yet another chain in trouble.

Interestingly our local mall is starting to come back with private shops and boutiques.  Hopefully they'll survive.

The Amazon takeover has devastated small businesses and chain stores are fighting for their very existence.  Such a shame.

[catfish1957]

This is such an overcrowded space.  Pizza Hut, Dominos, Pizza Inn, Papa Johns, Little Ceasars, etc.  all share a business model that survives on a 10%-25% gross profit margin.

And that competition remains fierce.  As pizza prices have not risen as fast as other fast food options. Some shakeouts are inevitable.

[banddag]

Many fast food chains are in trouble due top demographics. Gen X and Z would not be caught dead in a Cracker Barrel or Bob Evans.

Gen X and Z are also going to unique independent places for the "experience" and have no interest in the chain experience.

Took a client today for lunch at a mom and pop restaurant and I had to wait for a table for 20 minutes. I knew it was going to be crowded so went a 1/2 hr before the meeting.

Chain restaurants  have also overbuilt. As @catfish1957  mentioned above how many pizza places does each town need?

It's not all due to the economy. Lot of it is self inflicted industry problems. Darden restaurant chain has had money troubles for years.

[Wingnut]

Gen X was raised on Pizza Hut.  Family friendly dining. Kids loved their Book-It program and it put asses in the stores seats all for a free Personal Pan Pizza for a kid reading a book. (Kids reading a book?  How old school)  I don't know what happened to the Hut since the ought years, but they have descended into a sea of sameness with a shitty tasting Pie. 

Chains come and chains go.  The Pizza Hut is circling the drain.

[LMAO]

This is such an overcrowded space.  Pizza Hut, Dominos, Pizza Inn, Papa Johns, Little Ceasars, etc.  all share a business model that survives on a 10%-25% gross profit margin.

And that competition remains fierce.  As pizza prices have not risen as fast as other fast food options. Some shakeouts are inevitable.

And not only do you have chain pizza places in any town, but local pizza places as well

[roamer_1]

Sorry. Za Hut is twice the price of Little Squeezers at the door. And the pizza ain't as good. A Sqeezer pizza will physically weigh more for less cost. Significantly less cost.If I am going to spend the money it takes to buy Za Hut, I am more likely to spend it at Papa John's. Way, way better pizza. Way better.

And if I am looking for a cheap, quick pizza, that's gonna be Little Squeezers.

Domino's and Za Hut are too much. and they suck. Can't do both and survive.

[Bigun]

We have a little Mom and Pop pizza place here. Great pizza and prices competitive with any of the chains. Not even close.

Actually, it's an Italian restaurant that makes pizza like it should be made.

[Smokin Joe]

Locally, of the 4 chains, The Hut is the best. I guess a lot depends on the franchisee. Some add a  little extra.  While you have to dine in to get them at their best, the french fries are top tier, too, if they are still offering them as a side, up with the local DQ. Mc D's, Hardees, Arbys, are well below. The very best pizza in the area is 40 miles away over in Montana at a local waterhole.

[Weird Tolkienish Figure]

Haven't eaten there is probably decades and when I did it was sort of nauseating. Had a decor straight out of 1985 (and not in a good way), and smelled like antiseptic IIRC.

[catfish1957]

Sorry. Za Hut is twice the price of Little Squeezers at the door. And the pizza ain't as good. A Sqeezer pizza will physically weigh more for less cost. Significantly less cost.If I am going to spend the money it takes to buy Za Hut, I am more likely to spend it at Papa John's. Way, way better pizza. Way better.

And if I am looking for a cheap, quick pizza, that's gonna be Little Squeezers.

Domino's and Za Hut are too much. and they suck. Can't do both and survive.

I can remember back in the 1970's and 80's when Hut had a good product, plus they served cold tasty draft. 

Why pizza chains stopped serving beer is beyond me.  To me at the time, pizza was a natural with beer.

[DCPatriot]

My younger brother owned several independent pizza and sub shops in the Greater Buffalo, New York area.

He sold them all simply because of the cost of the ingredients.  He refused to use cheaper grade meats and cheeses.

At one time, he said that chicken wings were only $1.78 per pound.  Wings were considered scrap...until the Anchor Bar in downtown Buffalo made them globally famous.

And the mozzarella cheese?  Pizza chains today don't even use authentic mozzarella on their pies.

He used to sell a TON of chicken wings weekly.  WEEKLY!!

[roamer_1]

I can remember back in the 1970's and 80's when Hut had a good product, plus they served cold tasty draft. 

Why pizza chains stopped serving beer is beyond me.  To me at the time, pizza was a natural with beer.

Licensing cost I'd reckon.Serving beer means a bar license around here. And that would only be good in-house. You can't deliver beer. So as the business tilted toward delivery...

[roamer_1]

Locally, of the 4 chains, The Hut is the best. I guess a lot depends on the franchisee. Some add a  little extra.  While you have to dine in to get them at their best, the french fries are top tier, too, if they are still offering them as a side, up with the local DQ. Mc D's, Hardees, Arbys, are well below. The very best pizza in the area is 40 miles away over in Montana at a local waterhole.

We just lost Angie. Angela's Pizza is a hallmark here, though not in the touristy way. Blue collar all the way, and the alt.franchise best around here. She always kept the price down and the quality up. Started as a Stageline Pizza franchise way back in the day... She survived a war with the franchise and became Angela's. A long time... maybe thirty or forty years she made pies.

It's a damn crying shame she died. My age. My friend. And a damn crying shame her family locked the doors.
Angela's is gone now. Too bad.

That's the problem with the good independents... You get so used to em that they're part of the furniture... But eventually they get old, or die some way, and their particular genius just passes into the ether.

[Smokin Joe]

I can remember back in the 1970's and 80's when Hut had a good product, plus they served cold tasty draft. 

Why pizza chains stopped serving beer is beyond me.  To me at the time, pizza was a natural with beer.

They still do here, but this is outside the market area that appears to be having trouble in the Hut.

[catfish1957]

They still do here, but this is outside the market area that appears to be having trouble in the Hut.

Great beer with pizza?  Any one else remember Shakey's?

[Smokin Joe]

Great beer with pizza?  Any one else remember Shakey's?

I remember them back East, but they never made it this far out. Best pizzas I have had were local outfits, like The Village Pub in Harrisonburg, VA, or Coach's (30 years ago) in Culbertson, MT. Currently the best local Pizza is at the Powder Keg in Fairview, MT.

[Gefn]

Give me a good mom and pop pizza parlor any day.


Have you all seen this one is also closing some restaurants?

Hooters closing underperforming restaurants due to 'current market conditions'


https://www.usatoday.com/story/money/food/2024/06/24/hooters-closing-restaurants/74198060007/

[GrouchoTex]

A lot of restaurants are going under now.
I wonder if the new California law was the breaking point for them?
Cost to much to operate there and it may have affected those in other states.
As posted by @catfish1957 , the margins aren't that great, for any restaurant or fast food place.

[libertybele]

A lot of restaurants are going under now.
I wonder if the new California law was the breaking point for them?
Cost to much to operate there and it may have affected those in other states.
As posted by @catfish1957 , the margins aren't that great, for any restaurant or fast food place.

A lost of restaurants around here are dependent on tourists (obviously).  Last year was a good season because seasonal owners stayed around to fix up their homes and businesses post Ian as insurance companies were finally paying out.  This year, we're seeing a huge exit because of the high cost of insurance combined with inflation and people no longer want to live in hurricane central. So the restaurant business is slow right now, some are back to only operating a couple days a week.  Some have closed down completely.  We'll see what happens when tourist season starts up again.

[catfish1957]

A lot of restaurants are going under now.
I wonder if the new California law was the breaking point for them?
Cost to much to operate there and it may have affected those in other states.
As posted by @catfish1957 , the margins aren't that great, for any restaurant or fast food place.

I've heard that it has gotten so bad and cut throat that restuarants are fabicating Yelp reviews to survive, and poach customers.

[GrouchoTex]

I've heard that it has gotten so bad and cut throat that restuarants are fabicating Yelp reviews to survive, and poach customers.

I have heard this before as well.

[PeteS in CA]

Back in the 80s and early 90s we several cross-country trips, and for west of the Missouri M and Pizza Hut were fairly decent and consistent. In Kansas it seemed like every or every other town had a Pizza Hut.

We just lost Angie. Angela's Pizza is a hallmark here, though not in the touristy way. Blue collar all the way, and the alt.franchise best around here. She always kept the price down and the quality up.
...
That's the problem with the good independents... You get so used to em that they're part of the furniture... But eventually they get old, or die some way, and their particular genius just passes into the ether.

Give me a good mom and pop pizza parlor any day.
...

We used to Round Table regulars, but their cook quality control at the one near us got really inconsistent. We switched to a local place that had several stores in Campbell and the Peninsula, and then to a family-owned Italian restaurant that also does pizza. Much. Better.

A family that had operated two restaurants in Sunnyvale and Santa Clara (neighboring cities) for 2 or 3 generations decided to close their stores. They didn't give reasons, but I suspect they're tired and the business climate is not great.

A lot of restaurants are going under now.
I wonder if the new California law was the breaking point for them?
Cost to much to operate there and it may have affected those in other states.
As posted by @catfish1957 , the margins aren't that great, for any restaurant or fast food place.

For stores in California they had already been struggling for a couple of years to adjust to Bidenflation. A year and a half ago (well before the minimum wage bump) a couple that manages a chain fast-food store spoke about how some other f-f chain stores had had to bump prices 20%-25%, while their chain just 11%, but with another increase being considered. Good chains like In-n-Out and CfA were already paying their employees more than the minimum wage, even those starting. The moronic $20/hour bump was like a second, steel-toed, kick in the teeth for all f-f restaurants, and the effects are bubbling up to other restaurants and places that start people at or near minimum wage. So, yeah, the last-straw effect for a lot of businesses.

Something like a decade ago I read that up to 1/3 of Yelp reviews are phony - people trying to hype a restaurant or trying to torpedo a competitor. Reviews can be useful, but have to be taken with a block of salt. Looking for details that mean the reviewer might actually have gone to the reviewed place can help.

[berdie]

Great beer with pizza?  Any one else remember Shakey's?

Waving hand frantically. I remember Shakey's although I haven't thought about them in years. Yummy pizza.

I think, as already mentioned, the proliferation of pizza joints is a lot of what is happening. Same thing around here with Mexican restaurants. You really have to be special to stand out. And that's hard to do. And as an added hurdle...people are cooking at home. It's not rocket science to make a pizza (or Mexican or Italian). Heck, even a berdie can do it.