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A struggling franchisee closes 25 KFC restaurants in the Midwest

EYM Group, which has closed dozens of Burger King and Pizza Hut units in several states, has now closed numerous KFC restaurants in Illinois, Indiana and Wisconsin.
KFC
KFC is closing 25 units in Indiana, Illinois and Wisconsin. | Photo: Shutterstock.

EYM Group, a multi-concept operator that has closed dozens of units and placed others into bankruptcy protection, has closed more than two-dozen KFC restaurants in Illinois, Indiana and Wisconsin.

KFC confirmed local reports of the closures, including a pair of units in Indianapolis and several near Rockford and Peoria, Illinois.

“The decision to close a restaurant is always difficult for both the franchisee and the brand,” the company said in a statement. “All other KFC locations in these states remain open to our guests.”

But this is the latest in a series of closures involving EYM-owned restaurants.

Last year, EYM closed 26 Burger King restaurants in Michigan. The company was recently sued by a landlord over one of those closures.

Earlier this year, EYM closed 15 Pizza Hut restaurants in Indiana amid ongoing battles with the franchisor. EYM ultimately filed for bankruptcy and is putting most of its locations up for sale. Pizza Hut said in a filing in that bankruptcy that it is “willing to attempt to work” with various stakeholders to keep restaurants open.

The closures come amid ongoing industry challenges, as restaurants deal with the aftermath of a combination of inflation and weak sales. Each of EYM's brands have, at some point over the past two years, dealt with varying sales challenges.

A trio of Burger King franchisees filed for bankruptcy and other operators, including EYM, closed units following weak sales coming out of the pandemic. Pizza Hut U.S. has struggled with weak same-store sales in recent quarters.

KFC U.S. has also struggled. Same-store sales turned starkly negative this year, including a 5% decline last year. System sales are down 7% in the first half of the year.

This came after the brand closed more than 3% of its restaurants last year.

Executives with parent company Yum Brands have indicated that the company has a lot of work going on to “boldly reset the brand in the U.S.” But CEO David Gibbs acknowledged that, “The KFC brand in the U.S. has been struggling.”

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