The restaurant business isn’t an easy one. It’s prone to failure because of high costs and fickle customer tastes. Historically, however, pizza restaurants tend to do better, with a lower failure rate.
It’s easy to understand why. Making pizza is straightforward with standardized recipes, equipment, and more easily controlled costs. And it’s delicious, making it a staple food for many. That combination makes pizzerias highly scalable, allowing for multiple locations and even greater cost savings. Especially, since most pizza joints nowadays cater to take-out and delivery more than a more expensive to run dine-in business.
Over the years, those advantages have helped create highly recognized national pizza chain restaurants, including Domino’s, Papa John’s, and, of course, Pizza Hut.
Unfortunately, the pizza business has gotten tougher recently, and that’s taking a toll on the industry, particularly Pizza Hut, which boasts a footprint more geared for dine-in than Domino’s.
Inflation has retreated since its peak in 2022, but is rebounding since spring, crimping customer budgets. Layoffs are increasing the unemployment rate, and there are fewer open jobs, further straining wallets.
As a result, consumers’ spending on restaurants is shifting, and that’s taking a toll on quick-service restaurants and casual dining that rely on frequent visits from low- to middle-income consumers.
Pizza Hut has been particularly hard hit by the cutback in spending, with foot traffic and sales slipping, and key franchises globally going bankrupt. As a result, Pizza Hut’s owner, Yum! Brands, the operator behind the more successful KFC and Taco Bell, has announced it’s considering its options — business speak for significant changes are looming, including a possible sale.
Pizza Hut has a long, storied history
Pizza Hut is one of the original large pizza chains. It was founded in 1958 by brothers Dan and Frank Carney while they were in college in Wichita, Kansas. It quickly expanded to six locations within its first year and began franchising in 1959.
By 1977, when Pepsi acquired it for $300 million, it boasted about 4,000 locations. With Pepsi’s support, Pizza Hut’s footprint continued to grow, despite thousands of local competitors and rivals, such as Domino’s (founded in 1960) and Papa John’s (founded in 1984), which were also expanding.
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Pepsi spun off Pizza Hut and its other major brands, Taco Bell and KFC, as Tricon Global (later renamed Yum! Brands in 2002) in 1997 to concentrate on beverages (it wanted to sell its fountain drinks in rival restaurants) and its more profitable snack foods. Pizza Hut had over 11,000 stores at the time, including locations in 70 countries, making it the planet’s biggest pizza chain.
Nowadays, Pizza Hut remains one of the biggest pizza chains globally, boasting 19,786 locations, including 13,312 restaurants outside America in over 100 countries.
Pizza Hut Pizza Hut timeline:
- 1958: Dan and Frank Carney start Pizza Hut with $600 loan from their mother.
- 1969: Pizza Hut introduces its famous ‘red roof’ architecture.
- 1971: Becomes world’s biggest pizza chain by sales and locations.
- 1977: Sold to Pepsi for $300 million.
- 1980: Introduced pan pizza.
- 1986: Opened 5,000th store.
- 1994: Launches online pizza delivery ordering.
- 1995: Introduced stuffed crust pizza.
- 1997: Spun-out of Pepsi as Tricon Global Restaurants with Taco Bell, KFC.
- 2002: Tricon Global changes its name to Yum! Brands.
- 2025: Yum! Brands announces strategic review amid franchise bankruptcy headwinds in Turkey and the United Kingdom and slowing global sales and profit.
Pizza Hut suffers sales woes
While pizza remains a favorite (regardless of the New York vs. Chicago debate), sales have struggled as customers have become more fragmented, with some heading toward gourmet, higher-end pizzerias, while mainstream consumers have retrenched due to the economy.
US employers laid off nearly 1 million workers in the first nine months of 2025, up 55% year over year, according to Challenger, Gray, & Christmas, and the unemployment rate rose to 4.3% in August, its highest since 2021. Meanwhile, the Consumer Price Index inflation rate increased to 3% in September from 2.3% in April, before most tariffs took effect, further straining households.
Biggest pizza chains by sales worldwide (2024):
- Domino’s Pizza*: $19.1 billion
- Pizza Hut*: $13.1 billion
- Papa John’s*: $4.85 billion
- Little Caesars**: $3.5 billion.
- Marco’s Pizza**: ~$1 billion.
Source:Â *10-KÂ SECÂ filings, **QSR
The problems aren’t limited to the U.S. either. Shifting tastes and economic concerns have affected other regions, including the United Kingdom, causing Pizza Hut’s franchisee, DC London Pie, to file for bankruptcy last month. Pizza Hut also saw its franchisee in Turkey file for bankruptcy in January 2025 after Yum! Brands terminated their agreement because of low sales and poor standards.
Yum! Brands agreed to buy 64 of DC London Pie locations, resulting in the planned closure of 68 locations. In Turkey, all 537 of its restaurants were closed.
Overall, Pizza Hut’s system-wide and same-store sales at locations open at least one year fell by 1% and 4% in 2024. Its operating profit sank 5% from 2023 — dragging down positive sales and profit growth from Taco Bell and KFC.
Make-or-break moment approaches for Pizza Hut
It hasn’t gotten any easier for Pizza Hut in 2025. The UK bankruptcy meant it Yum! Brands had to step in to protect their best-performing locations there, costing them money even as Pizza Hut’s total sales continued to decline relative to Yum’s other brands.
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In the third quarter, system-wide and same-store sales at Pizza Hut each declined by 1%, while operating profit decreased by 8%. Concerningly, operating profit has dropped 14% year-to-date to $239 million, compared to the same period last year, as the operating margin has compressed to 33.6% from 38.9%.
That’s not a winning recipe, and with little sign of improvement, new Yum! Brands CEO Chris Turner announced on Nov. 4 that it could be time for a significant change. Turner and his CFO, Ranjith Roy, a former Goldman Sachs banker who helped orchestrate restaurant mergers and acquisitions at the firm and who was appointed CFO in September, have decided to review strategic alternatives for Pizza Hut.
It’s uncertain what the review will reveal, but typically, a strategic review is code for determining whether it makes sense to sell it lock, stock, and barrel.
“Turning to our Pizza Hut division… as we prepare the business for a potential transaction, our Q4 results may see some impact from actions involving isolated franchisee situations,” said Roy on Yum! Brands third-quarter earnings call. “Taking this and Pizza Hut’s year-to-date performance into account, full year 2025 Yum! performance may land slightly below our algorithm.”
The drag from Pizza Hut on Taco Bell and KFC, which are growing, appears to have management leaning toward an outright sale so that it can focus its attention on those restaurants.
“Our 2 biggest brands, KFC and Taco Bell, nearly 90% of our global divisional operating profit. They are the ones that drive the bulk of our growth, and they will continue on the trajectory that they’re on now,” said Turner on the call.
If a sale doesn’t happen, the review may necessitate a major restructuring of the brand, including potential closures.
Management hasn’t set a timeline for when it will decide on the next steps for the brand, but one thing appears clear: Pizza Hut’s future has become a lot murkier.
