How National Franchise Sales Navigated Tough Pizza Hut Sale After Operator’s Bankruptcy
National Franchise Sales completes complex auction process for distressed Pizza Hut locations.
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National Franchise Sales successfully orchestrated the auction of 77 EYM Pizza locations after the operator filed for bankruptcy. Despite a contentious relationship with Pizza Hut corporate, the sale generated nearly $12 million, with key concessions obtained to prevent further closures. The auction provided a crucial opportunity amid Pizza Hut's ongoing struggles with same-store sales declines.
Why It Matters
The restructuring of EYM Pizza's locations through this auction may affect territory availability for other franchisees, particularly within the QSR sector. Additionally, it underscores the need for franchisees to navigate operational challenges effectively amidst changing brand dynamics.
National Franchise Sales (NFS) successfully facilitated the sale of 77 locations owned by EYM Pizza, following the operator’s Chapter 11 bankruptcy filing in 2024. The auction revealed the challenges faced by both EYM and its franchisor, Pizza Hut, particularly after a contentious legal relationship. EYM had previously sued Pizza Hut, alleging it failed to adapt to modern business practices, complicating the sale process. Allan Gallup from NFS commented on the difficult dynamics, stating, “They despised this debtor. They didn’t want to do anything, in my opinion, to help this debtor…”
Despite these difficulties, NFS managed to execute a court-supervised auction in January 2025, resulting in the sale of the 77 restaurants to seven buyers, including Pizza Hut corporate, which acquired 18 units. The auction generated nearly $12 million for EYM’s bankruptcy estate. Key concessions were negotiated with Pizza Hut, including adjustments to capital expenditure timelines, royalty concessions, and transfer requirements, which were critical in preventing further closures. NFS began with 126 stores, yet many were deemed unsalvageable, leaving a viable package of 77 units, approximately a third of which were operating with negative EBITDA.
