Pizza Hut to close 29 restaurants putting 450 jobs at risk
Pizza Hut has also proposed a switch to a turnover rent model, which would see the rent it pays to its landlords being based on revenue levels in each outlet.
The company, which employs about 5,000 people in the UK, is also set to unveil plans for a company voluntary agreement (CVA), according to Sky News.
A CVA is a type of insolvency procedure where a company comes to an agreement with its creditors to pay back a proportion of the company’s debts over time. To go ahead its needs the support of 75% of the company’s creditors.
Rival pizza chain Pizza Express has recently had a CVA agreed and plans to close 73 restaurants and pay a reduced rent on the remaining sites.
Pizza Hut’s CVA is being supervised by the restructuring firm Alvarez & Marsal and could be confirmed this week.
Pizza Hut Restaurants is the main franchisee of the Pizza Hut brand in the UK, and is a separate company to the Pizza Hut UK business, which is focused on food delivery from a further 380 sites.
In a statement, a Pizza Hut Restaurants spokesperson said: “We are committed to doing the right thing and, in order to secure as many jobs as possible and continue serving our communities, we are working to reach an agreement with our creditors.
“We understand this is a difficult time for everyone involved. We appreciate the support of our business partners and are doing everything we can to help our team members during this process, including speaking with those affected by the consultation.”
Despite the success of Eat Out to Help Out, many casual dining chains are struggling to survive, with consumers not confident about going out amid ever-changing social distancing restrictions.
Last night’s announcement by Boris Johnson banning social gatherings of more than six people are likely to impact trade, especially if the rules are still in place during the busy Christmas period.