Signs Pizza Hut Is Struggling To Stay In Business

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When it comes to wide-reaching and quintessential American pizza chains, Pizza Hut certainly makes the cut. After all, what '90s kid doesn't have a memory of filling their bellies at a local Pizza Hut buffet after a middle school soccer game? Despite the fact that Pizza Hut's traditional fast-food buffet business model no longer exists, the company still operates as a pizza delivery and dine-in restaurant at thousands of locations across the United States.

At least ... for now. A string of unfortunate happenings involving the chain that brings with it so much nostalgia for millennial consumers has us wondering whether or not industry powerhouse Pizza Hut might be in danger. Despite the fact that the company is still ranked among the top pizza chains in America, failure is never too far off in the restaurant industry ... and the Hut appears to be teetering dangerously close to the edge. From bankruptcies and debt piles to mysterious closings and angry employees, here are some signs that Pizza Hut might be struggling to stay in business.

Its franchisees have filed for bankruptcy more than once in recent years

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A franchise, as it relates to the restaurant industry, forms when a person or company purchases rights to a restaurant's name and business strategy, buying the ability to operate under the banner of its logo. Many large-scale restaurant chains, such as Taco Bell, McDonald's, Chick-Fil-A, or (you guessed it) Pizza Hut have countless franchised locations to their names. And while every parent company wants to see its independently-owned restaurant locations succeed, sadly, Pizza Hut has recently watched two of its notable franchisees fall into the dark void of bankruptcy.

It started with NPC International, Pizza Hut's broadest franchisee, filing for Chapter 11 Bankruptcy in 2020. This is, perhaps, not terribly surprising given how heavily the restaurant industry as a whole struggled during the year that the COVID-19 pandemic raged, but nevertheless, nearly 300 Pizza Hut locations were shuttered as a result. Fast forward to 2024, when many restaurants are finally beginning to pull themselves out of the COVID rut ... except, apparently, for yet another of Pizza Hut's larger franchisees. EYM Pizza L.P. filed for bankruptcy in July of 2024, shortly after its parent company, Pizza Hut, was forced to sue it for failing to pay royalties. Ouch. Neither situation places a good feeling in our rumbling stomachs.

It's closing locations

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Restaurant chains can make the decision to close certain locations for a number of reasons. Maybe the restaurant in question is planted in a spot with poor visibility; there are complaints about a particular facility's management; or a report regarding a nasty failed health inspection rolls in. Or, potentially yet, overarching financial and legal problems faced by the corporation as a whole forces its hand, causing it to sacrifice a portion of its presence to the chopping block.

While we can't be certain exactly which of these possibilities, if any, are behind the recent and mysterious string of Pizza Hut closings, we can be certain that the suddenly-shuttered doors have caused a bit of a ruckus for worried pizza fans. Much to the dismay of many, the chain recently closed 15 locations without warning in the Midwestern region — with over 100 more rumored to be on the way to closure behind them. The official reasons behind this decision haven't been released, with Pizza Hut's official website confirming vaguely that an undisclosed number of closings will, indeed, be put into effect. However, the communal assumption is that these closures are likely linked to legal battles stemming from the recent bankruptcy of Pizza Hut's franchisee EYM. Whatever is truly going on behind the scenes, a lessening number of total stores is rarely a good sign.

It's facing backlash from its employees

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We've all heard the saying "a happy wife makes a happy life," but have you heard the one about happy employees making a business go 'round? If one thing's for certain, investing in the happiness and satisfaction of one's workforce virtually always has a positive impact on profitability as a whole. But while some large-scale retail and fast food corporations, like Costco or In-N-Out, harbor reputations for placing employee pay, treatment, and satisfaction on a pedestal, recent reports suggest that Pizza Hut may not be one of them.

In April of 2024, a three-day strike conducted by a group of Pizza Hut employees erupted in Los Angeles. The basis for this backlash? Claims of wage theft by managers, refusal to honor overtime pay, unfair and irregular scheduling, and eliminating sick leave. Yikes. While all of this may initially come off unbelievable or far-fetched, there are numerous admissions by alleged workers online that support these claims, with lack of breaks, ill treatment from management, and checks coming up short purported as being somewhat par-for-the-course where working at Pizza Hut is concerned. While we're sure that not every location's work environment is a negative one, we can't image that throngs of dissatisfied workers sprinkled throughout Pizza Hut's employee ranks is a scenario that bodes well for the future of the pizza chain.

Layoffs have plagued the company

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The topic of minimum wage increase (or decrease) is one that often instigates passionate argument on both sides. But regardless of what your personal opinions about hourly wage requirements may be, the reality is that fluctuating pay necessities impacts both the retail and food industries greatly. Sometimes, a rise in minimum hourly pay motivates companies — either by choice or necessity — to lay off a chunk of its workforce in order to match the higher rates required by the portion of employees it chooses to keep.

In an attempt to better the lives of minimum wage workers, California recently hiked up its starting hourly pay requirement for fast food workers to $20 an hour. However, this instigated a staggering move by two Pizza Hut franchisees in the area which, rather ironically, did not better the lives of a massive chunk of its employees. PacPizza and Southern California Pizza Company — both of which operate under the banner of Pizza Hut — put into action a massive layoff of 1,200 delivery workers in April of 2024, a move which caused a wave of discontent to spread among the company's employee force and onlooking consumers alike. Whether or not this move was perpetrated by the franchise's honesty inability to keep from going under financially, or simply an attempt at increasing profit margins, we aren't sure. However, we do fear that a significant slashing of the company's employee force could backfire ... in more ways than one.

There seems to be increased dissatisfaction surrounding the quality of its food

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"Here's why Pizza Hut sucks now," reads the title of an unforgiving Reddit post in which an unsatisfied consumer rips into the chain they claim used to be the pizza king. Unfortunately, posts like these in regard to Pizza Hut have been popping up more and more recently, with once-loyal consumers questioning the modern quality of the chain's menu items across online forums.

Reports regarding pizzas plagued by shrinkflation, laments over the company's switch from fresh dough to frozen, discussions about the use of lower-quality, frozen veggies and ingredients, and disappointment over the seemingly-constant discontinuation of favorite items abound when it comes to Pizza Hut — indicating an overall decrease in the chain's community favor. While of course there will always be naysayers regarding any chain restaurant, the amount of heat Pizza Hut in particular seems to be receiving feels especially elevated — leaving us to question how much longer it may be able to withstand the flames.

Its U.K. locations are barely keeping their heads above water

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Pizza Hut may be headquartered in America, but its reach is hardly confined to the United States. The company's presence is worldwide, with locations planted in the North American, South American, African, Australian, and Eurasian continents. But for those Pizza Hut restaurants in the United Kingdom, recent happenings have us wondering whether or not the franchise might be forced to take Europe off of its residency list soon.

Pizza Huts in the U.K. have had an especially rough few years from a performance and profitability standpoint. Heart with Smart, the organization operating the U.K.'s Pizza Hut restaurants, has reportedly amassed £73 million in debt — a staggering pit that the franchisee is just beginning to attempt crawl its way out of. While 2022 appears to have been the peak of the company's financial losses, things appear to be looking slightly up for the Pizza Huts in Heart with Smart's charge in 2024. Recent reports put the corporation's current overall operating numbers in the positive, with approximately £1.75 million gained in profit as of August. Still, the road to recovery is long and perilous, and many experts express concerns over the group's ability to keep this forward momentum going in the European market.

Prices are skyrocketing, according to consumers

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There are a number of reasons price tags at restaurants rise. Increased pay requirements for staff, hiked up prices on ingredients, rising property rent for locations' spaces, and more can all affect how much your fast food spots may charge for your preferred entrée — and Pizza Hut is not safe from this fluctuating reality. But while many restaurants have experienced an influx in menu prices over the last few years, consumers conclude that Pizza Hut's feels especially poignant — even downright unnecessary.

"Why is Pizza Hut more expensive than competition?" read the title of a Reddit thread. "Is there a reason? Like paying workers more? Better ingredients?" Users on this thread alleged that Pizza Hut isn't offering especially worthwhile products or amplified employee pay; rather, its prices are pushed higher on the basis of its name alone. "Because they still think their name means high-quality pizza," reads the top comment on the thread. "Unfortunately the pizzas ... are not near as good as they used to be several years ago. Plus ... Parmesan cheese now costs [more], regular pan cost[s] extra, extra cheese & marinara sauce have gone up. Our pizzas usually cost more than $5 more than the list price by the time we get it how we want." Overall, majority consumer feeling reflects that Pizza Hut's prices are becoming unsustainable ... causing many to find better deals in the arms of competing pizza chains.

It may be using days-old dough in an attempt to cut costs

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A company making efforts to cut costs (and thus increase profits) can come in the form of less money spent on advertising, increased outsourcing of its products, or utilizing A.I. and other forms of technology as opposed to paid workers. For the Pizza Hut chain, employees claim that the company may be saving some money in one rather unusual, but significant, way — through the use of old dough.

It's true. Employees across internet forums are alleging that days-old dough is often utilized in Pizza Hut kitchens in an attempt to cut costs — and that it alters the quality of the final product. When customers request an explanation as to why their Pizza Hut pies are thinner, smaller, or have less pillow-like softness in the center on platforms such as Reddit, alleged workers are quick to jump to the state of the uncooked dough as being the reason. "Food cost on dough is so low," commented a user in r/pizzahut, "but instead of planning it out, they [Pizza Hut] make a ... ton and use it for 3 days." Sheesh. While we can't fault a company for trying to increase profits where it can, we can't imagine that using potentially questionable ingredients is the way to go if maintaining customers is your end goal.

Claims that the company is rebranding existing products to generate consumer interest abound

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A new tasty salad, a never-before-seen stuffed crust variation, or a fresh brownie dessert: newly-released items at pizza chains stand to shake up your standard order, throwing some excitement into the mix alongside your usual pepperoni pie. In addition, having new food choices tends to generate greater consumer interest ... and, ideally, a surge in business and profits as a result.

And Pizza Hut is no stranger to newly-released menu items. In an attempt to satisfy eaters and bring in greater numbers of curious consumers, the popular chain has introduced a number of new pizzas and sides over the years ... but how new are they, really? According to numerous claims made by alleged Pizza Hut workers online, the majority of the chain's newly-released products are simply recreations of already-existing pizzas — just re-branded, and slapped with a major up-charge on account of their "newness." Take the recently-introduced Tavern Pizza, for example, which employees claim is nearly identical to the now-discontinued Edge Pizza, or the previously-offered Detroit Pizza, whose rectangular shape bears an obvious resemblance in both style and dough to the Big Dinner Box entree. All in all, users conclude that Pizza Hut could stand to put some real creative thought into this rather shady menu strategy, as some appear to be tiring of the alleged continuous swap-out.

Its dine-in business model is becoming increasingly unsustainable

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The original Pizza Hut business models relied on all-you-can-eat buffet style and sit-down dining: models which, to the despondency of some, have been mostly phased out. But while you might believe the slow death of Pizza Hut's dine-in operation is due to the naturally changing market and consumers' increasing preference for take-out rather than physically sitting in-house, as it turns out, financials could also play a large role in the abandoned dine-in sections of many of Pizza Huts.

While many locations still have an attached sit-down space, it's becoming increasingly rare to find them in actual operation, with most restaurants choosing to work strictly under delivery or take-out. The reason for this, according to the explanation of a self-professed Pizza Hut manager on Reddit, is mostly due to the cost of labor. With corporate wanting to keep the money spent overall on paychecks low, many locations will choose to either close their dining rooms completely, or otherwise limit its operation to a few hours a day, when there are employees to spare who are trained for tables. In most cases, the operation of the dining room is, quite simply, not considered worth it from a financial standpoint. We still believe this is likely heavily influenced by the current anti-sit-down market trends, and that not enough consumers are utilizing the sit-down space, when it is available, to justify its staffing. Nevertheless, Pizza Hut's abandoned dining rooms are giving many negative vibes. 

The company's lacking customer service is leaving a dangerously bad taste in peoples' mouths

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It's a byproduct of living in the modern era: every restaurant has an app. Whether you consider this a gift or a curse, Pizza Hut, along with all of its pizza chain competitors, has an online and mobile application you can use to order food, or to check out menu changes and local deals. Unfortunately, many consumers allege that Pizza Hut's app in particular has quite a few glitches to work out: most notably, the repeated complaint that the ability to apply accumulated points and rewards to orders is often disabled.

Adding to the frustration surrounding this often-experienced malfunction is the fact that the company's customer service support line is, according to customers, extremely lacking. Complaints about ignored emails and uncaring, automated responses abound, with very few shoppers reporting satisfaction with Pizza Hut's support line. While we understand that a bit of he-said-she-said goes into the customer service satisfaction at any company, there seems to be enough negative buzz surrounding the Pizza Hut help department for us to speculate that there may be some truth to it. If one thing's for sure when it comes to remaining successful as a business, it's that keeping one's customers happy is paramount. Can Pizza Hut keep smiles on the faces of its paying consumers ... or will the Hut be ultimately out-pizza'd? We suppose only time will tell.