-- Shares Facebook Twitter Reddit Email Pizza Hut is currently embroiled in a back-and-forth legal battle with one of its largest franchisees. The multinational pizza chain is suing EYM Pizza over alleged underperformance and financial mismanagement, according to a report from QSR Magazine . EYM Pizza currently operates 140 restaurants across Georgia, South Carolina, Illinois, Indiana, and Wisconsin.
The suit comes in the wake of EYM abruptly closing 15 locations across Northwest Indiana, according to the Times of Northwest Indiana . Under their franchise agreement, Pizza Hut grants EYM the right to operate its business and sell and distribute restaurant goods and services associated with Pizza Hut’s trademark. EYM is also responsible for maintaining specific operational standards, making timely payments, and taking on “necessary restaurant upgrades and transitions to delivery-focused models,” as explained by QSR.
However, much of that agreement began to fall through from 2019 to 2023. Pizza Hut’s same-store sales increased seven percent during that time. On the contrary, EYM’s same-store sales decreased 10%.
Related California fast food workers have been hit with layoffs ahead of new minimum wage law In the suit, Pizza Hut claimed EYM’s performance is “among the worst of all large Pizza Hut franchisees.” Between Feb. 2023 and Feb.
2024, more than 12% of EYM’s restaurants failed inspection. That is four times the average failure rate, Pizza Hut said in the l.
