Money-losing Pizza Hut Korea Ltd., the Korean master franchisee of the giant US pizza franchisor, has filed for a corporate rehabilitation proceeding in Seoul in a bid to avoid a cash crunch after it was slapped with a court order to compensate its local franchisees over 20 billion won ($15 million).
CASH SHORTFALLS AFTER PIZZA SALES DROPPizza Hut Korea founded in 1991 has been grappling with a cash shortage after logging an operating loss for two years in a row last year.Its loss came at 4.5 billion won in 2023, jumping 15-fold from the prior year’s loss.“Its sales and profit shrank together after consumers have turned their back on the brand following a series of price hikes during inflation,” said an unnamed official from the Korean food and beverage industry.
The Korean operator of Pizza Hut said its local stores remain open and operate as usual despite the rehabilitation filing.“We will continue to talk with the franchisees to reach an amicable settlement under court mediation so we can resolve the account freeze as soon as possible,” Pizza Hut said in a statement.
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