
Multiple buyers have emerged for 77 Pizza Hut locations owned by the franchisee EYM Group following a bankruptcy court auction this week, according to legal filings on Thursday.
Six different bidders won the auction for the restaurants in Georgia, South Carolina, Illinois and Wisconsin. Their bids totaled more than $11.78 million. The various deals must still receive final court approval.
Among the bidders was Pizza Hut, which is slated to buy at least 18 restaurants. The company could sell the restaurants to other franchisees or could run the locations itself.
The 77 restaurants are a far cry from the 142 locations that EYM Group operated just before it placed the restaurants into bankruptcy last year. The unsold restaurants have already been closed, meaning that 65 locations have been shuttered.
“While some restaurants in these markets have closed as a result of the EYM Pizza Chapter 11 bankruptcy, we look forward to working with the franchisees who, in combination with Pizza Hut, committed to purchase over 70 of the EYM restaurants at the bankruptcy auction yesterday to continue serving these communities delicious Pizza Hut pizza,” Pizza Hut said in a statement.
The successful bidders for the Georgia and South Carolina restaurants include PZH Foods and Valor Pizza.
The buyers of the Illinois restaurants are KK Management and Shawn Patel. In Wisconsin, the buyers are PZH Foods and PH Hospitality Group. Pizza Hut is also buying restaurants in each group.
The Plano, Texas-based Pizza Hut had been the stalking horse bidder for 39 of the locations that were up for sale. Pizza Hut has agreed to pay $40,000 per restaurant, or $1.56 million. In most cases, other buyers emerged to pay a higher price.
EYM Pizza filed for bankruptcy last year following a dispute with the company, which terminated the company’s franchise agreement in multiple states, largely over underpayment of royalties. Pizza Hut said the company had weaker-than-average sales and operating results.
The franchisee had earlier filed a lawsuit against Pizza Hut, accusing the company of its own underperformance, noting that it fell behind rival Domino’s and that the brand has “no image or identity that sticks with patrons.”
EYM Group is owned by Eduardo Diaz, a former president of McDonald’s Mexico who started buying up Pizza Huts in 2015. The company filed for bankruptcy last year with $23 million in bank debt and having spent $46.6 million to buy and renovate restaurants.
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