Three Major Pizza Hut Markets on the Block: What's Next?

Stalking Horse Bid Deadline – November 20, 2024 A Stalking Horse Bid is an initial bid for assets from a qualified bidder, which sets the base value for the assets that will be sold. NFS's structured process for selecting a Stalking Horse Bidder establishes a minimum floor value for the stores.

Because the 127 Pizza Hut restaurants are spread across several markets, there’s potential for multiple Stalking Horse Bidders. Each market area—spanning Illinois and Indiana, Georgia and South Carolina, and Wisconsin—may have its own Stalking Horse Bid, which can add competitive dynamics to the bidding process.

Final Bid Deadline – December 11, 2024 After the Stalking Horse Bid(s) are announced, interested and qualified bidders will be able to submit a new, higher, or better bid. Better doesn't always mean higher; bidders may set themselves apart with all-cash offers and quick closings. The ideal bid combines both higher value and favorable terms, which can quickly make it stand out.

This opportunity remains open until the Final Bid deadline on December 11, 2024, giving interested buyers a final chance to acquire the assets.

Stalking Horse Bidder Strategic Advantages Being the Stalking Horse Bidder offers several strategic advantages. It grants the bidder the first opportunity to set a competitive baseline price, provides for break-up fees if they are eventually outbid, and gives the bidder the opportunity to increase its bid, if necessary, to secure the assets. This position also provides valuable insight into competing bids and increases the likelihood of securing the assets, creating a powerful advantage in the acquisition process.

Possible Conversion to Alternative Concepts – Not Necessarily the Pizza Hut Brand It is possible to bid on the assets and not keep them as Pizza Hut stores. Converting Pizza Hut assets into an alternative restaurant brand or other use may offer bidders a cost-effective path to growth by utilizing existing real estate, improvements and equipment, reducing both capital expenditures and setup time compared to new builds. It can also provide an inroad into the market for a competitor or other strategic moves by a non-Pizza Hut buyer.

Final Selection of Winning Bids – December 13, 2024 After the Qualified Bid period closes, winning bids will be selected and announced by December 13, 2024. NFS will submit the successful bids to the court and the franchisor for final approval, ensuring all transactions meet regulatory and franchisor standards (if the locations remain as Pizza Hut stores).

Close of Escrow – January 23, 2025 The target date to close escrow for all 127 Pizza Hut units is January 23, 2025. This finalizes the sale process, transferring ownership to the successful bidders and allowing the new owners to begin operating under their own management.

Why This Bidding Process Matters for Franchise Buyers This sale provides a unique opportunity for qualified investors looking to expand their footprint in the franchise industry. Pizza Hut, a well-established and recognizable brand with strong customer loyalty, offers potential buyers an opportunity to enter and expand in key regional markets.

National Franchise Sales’ role as the managing firm helps ensure that the bidding process remains transparent, efficient, and equitable for all interested buyers, providing them with support and information to facilitate their participation in this highly competitive sale.

About National Franchise Sales National Franchise Sales (NFS) is a leading M&A advisory and brokerage firm specializing in the sale, acquisition, asset restructuring, and refranchising of existing restaurants and restaurant brands. NFS provides strategic planning, expert advice, and proven execution to optimize the various stages of franchise investment.