(CMR)The operators of over 1,000 Pizza Hut locations and 400 Wendy's stores, NPC International, has filed for bankruptcy.
In January, NPC International missed an interest payment, leading credit rating agency Moody's to downgrade its rating.
The company has been dealing with years of weak sales, increased labour cost and a high debt burden.
In court documents, NPC placed most of the blame on Pizza Hut, citing a “deteriorating brand image and lack of innovation.”
“The Pizza Hut brand continues year after year to lose market share to its national competitors,” the company said further adding that Domino’s and Papa John’s have “better technology or more compelling price and product offerings.”
NPC had been in talks with Pizza Hut for months and made the filing the day after a forbearance agreement with its franchisor expired.
NPC revealed that it had reached deals with its lenders on the framework of restructuring and plans to sell its Wendy’s business.
NPC is to continue its operations while it navigates the Chapter 11 process.
According to the company website, NPC employs nearly 40,000 people in 27 US states.