Pizza Hut Meltdown in New Orleans/Baton Rouge

A 44 unit Pizza Hut operator in New Orleans and Baton Rouge, Larry Lundy, closed all units this week, following collapse of a deal to sell those restaurants back to Pizza Hut. Pizza Hut sued Lundy Enterprises in federal court this week, citing non payment of royalties and other payments.

The story and picture of one the units in the article, is illustrative of the difficulties this franchisee faced over time.

64 no 44 no I'll take those 10

I won’t weigh in on this one other to offer a general opinion where a large block of franchise units technically end up back in the control of the franchisor. Pizza Hut is ‘auditing’ what those markets need seemingly focusing on what the number of outlets should be now that any capital outlay might be its own.  Not a new story to audit after the sheep has bolted.

This Hurt Zee Maybe Not So Hurt...

He's getting a five year consulting contract out of this.  Quite the severence (redunancy) payment.

Sounds like there was a little bit of hubris here.  He was a golden boy ('scuse me, maybe he doesn't want to be called 'boy'; okay golden man) who was granted a huge area franchise.  He wanted to have all kinds of stores everywhere.  He didn't want anyone to lose jobs.  He made charitable works a performance metric for his managers.  But was he running the business?

Too much expansion, to many stores, getting deflected away from core competence which was SERVING PIZZA.  I don't feel at all sorry for the Zee.  I saw something that reminds me of this, that playing out up close to me.  Guy comes in from out of town, affirmative action, prominent minority businessman, Zor sell him more than 15 existing stores at once.  Many of them stores that existing long-time neighboring Zees wanted to buy.  The guy instantly became the biggest Zee in the region.  A few short years later he is behind on advertising fund payments and who knows what else, and most of his stores get sold in distress.

Australia had Baskin Robbins

Australia had Baskin Robbins and Krispy Kreme come undone for similar/same reasons. Poor performance from all involved.