Second-tier fast food brands have struggled since the Covid pandemic.
That's because while chains like McDonald's and Domino's had already invested heavily in their apps and delivery operations and/or partnerships, lesser brands were not prepared.
It was easy for McDonald's, Domino's, Chipotle, and Starbucks to move to a take-out and drive-through plus delivery model when Covid forced lockdowns. Those chains did not invest in technology because they expected a global plague, but once one hit, they were ready for it.
Related: Struggling whiskey brand files for bankruptcy, closes
Other companies were caught off guard and saw their sales drop. Once operations returned to normal, they were then hit by the twin whammy of rising labor costs and higher food prices. Add in the pressure to offer value meals — generally multiple items for $5 — and you see why some franchise operators struggled.
Burger King lost multiple franchise operators to Chapter 11 bankruptcy filings and had to step in to buy hundreds of franchised restaurants to keep them from closing. Yum Brands (YUM) Pizza Hut was also hit by a key franchise operator filing for Chapter 11 bankruptcy and suing the company.
Now, another division of that same company has quietly closed over half of its locations of another storied fast-food brand.
Image source: Shannon O'Hara/Getty Images for Pizza Hut
EYM Group faces new struggles
EYM Group operates restaurants in 7 states including Texas, Florida, Illinois, Indiana, Georgia, South Carolina, and Wisconsin. The company operates Burger King, Denny's, Pizza Hut, KFC, and Panera Bread franchises.
It filed for Chapter 11 bankruptcy in July for its EYM Pizza and EYM Pizza of Indiana units in July. It has been embroiled in a lawsuit with Yum Brands.
"EYM accused the company of falling behind its competitors in technology and practices, and the company’s pizza division filed for bankruptcy following the closure of several Midwest units. Last year, EYM’s Burger King subsidiary, EYM King, closed dozens of units and is currently facing a lawsuit from Armada Oil and Gas for allegedly failing to pay rent and for breaking a lease," RestaurantDive reported.
In its EYM Pizza Chapter 11 bankruptcy filing, the company said it had between $500,000 and $1 million in liabilities and between $0 and $50,000 in assets. Its EYM Pizza of Indiana Chapter 11 filing did not include an asset or laibility range.
Sign up for the Come Cruise With Me newsletter to save money on your next (or your first) cruise.
EYM closes more than half of its KFC locations
While it's unclear how the Chapter 11 bankruptcy filings impact its other business operations, the company has closed more than half of its KFC restaurants.
The company has closed 25 of its 47 KFC locations. The company itself did not share this information but it was reported by local news outlets.
One location that closed had a sign posted on its window.
More bankruptcy:
- Struggling Home Depot rival files for Chapter 11 bankruptcy
- Popular Italian restaurant chain files for Chapter 11 bankruptcy
- Another distressed trucking company files Chapter 11 bankruptcy
“We want to take a moment to express our heartfelt gratitude for your loyal support over the years. It is with mixed emotions that we announce the closure of our store,” a sign posted on the restaurant door said. “We understand this news may come as a surprise, but we feel it is the right decision for us at this time."
EYM has not commented on the closures or its ongoing Chapter 11 bankruptcy cases.
"Restaurant Dive confirmed the locations were not accepting online orders, and called several of the reportedly closed stores to receive no answer. When KFC filed its franchise disclosure document in March, EYM Chicken was listed as owning 47 stores at the end of 2023, meaning recent closures likely impacted a majority of its units," the website reported.
EYM Chicken has only been operating since 2019. The company has not acknowledged the closures or its Chapter 11 filings on any of its websites.
Related: Royal Caribbean, Carnival share key cruise ship bathroom rule
