Pizza Hut tests landlords' appetite for turnover rent
Pizza Hut will propose switching to a turnover rent model to align its costs with revenues as part of a financial restructuring plan, according to a report.
The UK arm of the international pizza chain wants to pay landlords rent based on revenue at each of its 245 restaurants, Sky News reported. The proposal is similar to a model adopted by New Look, which has called on landlords to accept up to 12% of turnover as rent on its stores.
The proposal will be part of a company voluntary arrangement that also includes closing 29 of Pizza Hut's 245 outlets putting about 450 jobs at risk, Sky said. The CVA could be launched as soon as Wednesday evening.
"We appreciate the support of our business partners and are doing everything we can to help our team members during this process, including speaking with those affected by the consultation," Pizza Hut told Sky.
Pizza Hut is one of many restaurant chains resorting to rescue plans as Covid-19 restrictions and economic uncertainty add to pressures caused by a glut of casual dining chains and rising costs. Restaurants' sales have been boosted by the government's "eat out to help out" subsidy which finished at the end of August.
Pizza Hut Restaurants is the main franchisee of the Pizza Hut brand in the UK. Pizza Hut UK is a separate company that focuses on deliveries.