Pizza Hut to close hundreds of dine-in restaurants

Pizza Hut is planning to close as many as 500 dine-in restaurants as it shifts its business model.

Food Business News reports the pizza chain is increasing its focus on delivery and carryout and could close as many as 500 older dine-in locations.

“We are leaning in to accelerate the transition of our Pizza Hut U.S. asset base to truly modern delivery/carryout assets,” said David W. Gibbs, president, chief operating officer and chief financial officer for Yum! Brands, said according to FBN. “This will ultimately strengthen the Pizza Hut business in the U.S. and set it up for a faster long-term growth.

“During this transition, we expect a temporary deceleration in the pace of new unit development for the Pizza Hut division as continued healthy international unit growth will be partially offset by a short-term decline in the absolute number of U.S. units. As a result, our U.S. store count could drop to as low as 7,000 locations over the next 24 months, primarily driven by closures of underperforming dine-in restaurants before rebounding to current levels and above in the future.”

Within the U.S., about 6,100 Pizza Hut locations are traditional restaurants and 1,350 are express units, he said.

“But as far as the numbers and how the math works, it’s hard to estimate how soon the timing of when a store will close and then when the replaced unit will open,” Mr. Gibbs said. “There will be gaps on some of those, but certainly, our goal is to try to minimize those gaps.”

Pizza Huts with lower volume will close, he said.

“We are excited about collaborating with franchisees who are capable, well-capitalized, committed to the brand and who have a growth mindset to accelerate the closure of underperforming dine-in stores and replacement with new delivery or fast casual delivery assets,” said Greg Creed, chief executive officer for Yum! Brands. “By the same token, we also know we’ll need to directly address franchisees who are burdened with too much debt, don’t have access to capital or aren’t committed to the long term. Thus, in a few cases, some of these businesses will need to be restructured in the near term to address capital structure and leverage issues, particularly those franchisees with greater dine-in exposure.”

A list of locations closing has not yet been made available. 

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Ken Haddad is the digital special projects manager for WDIV / He also authors the Morning Report Newsletter and various other newsletters. He's been with WDIV since 2013.