Pizza Hut franchisee EYM Pizza and affiliated companies have filed for Chapter 11 bankruptcy protection, owing nearly $23 million to suppliers and Manufacturers Bank.
Restaurant News reported that the franchisee owes Manufacturers Bank more than $21 million and Pizza Hut just under $2.25 million.
The bankruptcy protection filed in the Eastern District of Texas comes after Pizza Hut sued EYM for not paying royalties on time despite being granted a forbearance period last year.
EYM Pizza operates around 140 Pizza Hut restaurants in the South and Midwest.
Prior to Pizza Hut launching the legal action, EYM Pizza first filed a lawsuit against the restaurant chain for breach of fiduciary duty, among other claims, but it was dismissed.
The report noted restaurant bankruptcies as a growing trend, with Red Lobster, Rubio’s Coastal Grill, Melt Bar & Grilled, Sticky’s, Tijuana Flats, One Table Restaurants, Miracle Restaurant Group and River Sub as among those who earlier filed for protection.