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NPC, Largest US Restaurant Franchise

OVERLAND PARK, Kansas — NPC International, a 1,144 multi-unit franchise owner of Pizza Hut restaurants in 28 states, has topped all other restaurant franchises. It is not just the prince of pepperoni in the pizza world, but NPC is also the largest restaurant franchise in America, bar none. That's according to a 2010 Technomic/Restaurant Finance Monitor report.

Acquired by Merill-Lynch Global Equity Group in 2006, the large franchise of Yum Brands (NYSE:YUM) has seen sales of $845 million in 2009 (pdf). During the year, it closed some restaurants and acquired others. And so far, this year hasn't been that bad for the company when it comes to growth. NPC saw its second quarter results for 2010 in comparable store sales increase by 10.4 percent compared to a 12.6 percent decrease in 2009. Its EBITDA remains flat at $25.7 million.

Jim Schwartz, chairman and CEO of NPC, thinks that Pizza Hut is one of the great iconic brands of America. It's come a long way since its was founded in 1962 by Gene Bicknell, one of the first Pizza Hut franchisees.

Shwartz says, “We’ve achieved this by investing in what we know, and trust, and that’s Pizza Hut.”

Technomic reported that Yum Brands (NYSE:YUM) has 134 of the largest 500 franchisees, more than any other franchising firm by far. With 65, McDonald's has the highest number of wealthy franchisees for a single brand.

NPC's CEO thinks the franchise has been greatly boosted to its present success by its franchisor's support system. “Yum is a large, well-capitalized franchisor, and working together, we’ve got the brand going in the right direction,” says Schwartz. “We are fortunate to have a great relationship and the mutual respect of our organizations.  We are very respectful of the partnership we have with the Pizza Hut/Yum team and clearly understand the importance of our working relationship.  It’s not always ‘perfect’ but I don’t think they would have allowed us to grow to the size we are if they didn’t look at us first as a great operator, and secondly as a great partner in the business.”

Schwartz cautions, “Pizza is not for the faint of heart and while Pizza Hut Inc. is a great franchisor, this business requires massive experience and oversight to be very successful.  Even we have learned the power of sticking with what you know and do best.”

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