Second-tier fast food brands have been struggling since the Covid pandemic.

This is because chains such as McDonald’s and Domino’s had already invested heavily in their apps and delivery activities and/or partnerships, while smaller brands were not prepared for this.

It was easy for McDonald’s, Domino’s, Chipotle and Starbucks to pivot to takeout, drive-through and delivery when Covid forced lockdowns. Those chains didn’t invest in technology because they expected a global plague, but when one hit, they were ready.

Related: Struggling whiskey brand files for bankruptcy, closes

Other businesses were caught off guard and saw their sales plummet. When operations returned to normal, they were hit with the double whammy of rising labor costs and higher food prices. Add to that the pressure to offer value meals — typically multiple items for $5 — and you can see why some franchisees struggled.

Burger King lost several franchisees to Chapter 11 bankruptcy filings and had to buy hundreds of franchise restaurants to keep them from closing. Yum Brands (Tasty) Pizza Hut also faced a major franchisee filing for Chapter 11 bankruptcy and suing the company.

Now, another division of that same company has quietly closed more than half of the locations of another famous fast food brand.

Be the first to see the best deals on cruises, special cruises and more. Sign up for the Come Cruise With Me newsletter.

Pizza Hut is having a harder time than Domino’s.

Image source: Shannon O’Hara/Getty Images for Pizza Hut

EYM Group faces new problems

EYM Group operates restaurants in 7 states, including Texas, Florida, Illinois, Indiana, Georgia, South Carolina and Wisconsin. The company operates Burger King, Denny’s, Pizza Hut, KFC and Panera Bread franchises.

It filed for Chapter 11 bankruptcy for its EYM Pizza and EYM Pizza of Indiana units in July and is embroiled in a lawsuit with Yum Brands.

“EYM accused the company of lagging behind its competitors in technology and practices, and the company’s pizza division filed for bankruptcy after closing several Midwest locations. Last year, EYM’s Burger King subsidiary, EYM King, closed dozens of locations and is currently facing a lawsuit from Armada Oil and Gas for allegedly failing to pay rent and breaching a lease,” RestaurantDive reported.

In its EYM Pizza Chapter 11 bankruptcy filing, the company said it had between $500,000 and $1 million in debt and between $0 and $50,000 in assets. Its EYM Pizza of Indiana Chapter 11 filing did not include an asset or liability range.

Sign up for the Come Cruise With Me newsletter and save money on your next (or first) cruise.

EYM closes more than half of its KFC stores

While it’s unclear what impact the Chapter 11 bankruptcy filing will have on the company’s other operations, the company has closed more than half of its KFC restaurants.

The company has closed 25 of its 47 KFC locations. The company itself did not share this information, but it was reported by local news outlets.

At one of the locations that was closed, there was a sign on the window.

More bankruptcies:

• Struggling Home Depot competitor files for Chapter 11 bankruptcy
• Popular Italian restaurant chain files for Chapter 11 bankruptcy
• Another struggling trucking company files for Chapter 11 bankruptcy

“We would like to take a moment to express our sincere gratitude for your loyal support over the years. It is with mixed emotions that we announce the closing of our store,” reads a sign on the restaurant’s door. “We understand that this news may come as a surprise, but we feel that this is the right decision for us at this time.”

EYM declined to comment on the closings or the ongoing Chapter 11 bankruptcy cases.

“Restaurant Dive confirmed that the locations were not accepting online orders and reportedly called several of the closed stores but did not receive a response. When KFC filed its franchise disclosure document in March, EYM Chicken was listed as owning 47 stores as of the end of 2023, meaning recent closures likely impacted the majority of its locations,” the website reported.

EYM Chicken has only been in business since 2019. The company has not listed the closures or Chapter 11 filings on any website.