Pizza Hut's UK dine-in operations, managed by franchisee DC London Pie Ltd, have fallen into administration, leading to the closure of 68 restaurants and placing hundreds of jobs at risk. The move comes less than a year after the business was last saved from insolvency, signaling deep-seated challenges within the casual dining sector. FTI Consulting was appointed as administrators for DC London Pie Ltd, following reports of HMRC filing a winding-up petition against the company six weeks prior.

Amidst the administration, Pizza Hut's global owner, Yum! Brands, executed a pre-pack administration deal to acquire the UK restaurant operations. This critical intervention aims to safeguard 64 of the at-risk dine-in sites, ensuring their continued operation. As part of this rescue, approximately 1,277 team members, including above-restaurant leaders and support teams, are expected to transfer to the new Yum! equity business under UK TUPE legislation. However, the 68 restaurants not included in the rescue deal will cease trading, resulting in the loss or threat to between 700 and over 1,200 jobs, with some reports indicating up to 741 positions made redundant.

The immediate impact on employees was significant, with reports of staff being sent home without clear explanations and told not to discuss the situation. A staff member in Leeds expressed uncertainty, as eight out of the city's eleven restaurants reportedly closed abruptly. Nicolas Burquier, Managing Director International Operating Markets at Pizza Hut, emphasized that the acquisition's immediate priority is "operational continuity at the acquired locations and supporting colleagues through the transition," aiming to "safeguard our guest experience and protect jobs where possible." Pizza Hut Takeaway branches remain unaffected, as they operate as a separate business entity.

Analysts have suggested that the current administration represents a "second collapse" for the business in just nine months, highlighting "fundamental structural problems" that previous "quick-fix rescue deals" failed to resolve. The previous owner, Heart with Smart Limited, went bankrupt with nearly £40 million in debt. The US-based private equity firm Directional Capital, which owns DC London Pie, had acquired the dine-in business in January through a pre-pack administration. The struggles are attributed to a confluence of factors plaguing the hospitality sector, including soaring energy costs (up 300%), labor shortages driving up wages, dwindling consumer budgets, and intense competition from delivery apps. Gary Hemming of abcfinance.co.uk described the situation as "brutal mathematics facing casual dining chains," suggesting the "traditional restaurant model is broken" and businesses are burdened with "pre-2020 property portfolios in a post-2020 world."

Pizza Hut, founded in 1958 and entering the UK market in Islington in 1973, experienced a boom in the 1980s, opening an average of one restaurant per week. However, in recent years, its market share has diminished. Five years ago, the brand had almost 240 UK restaurants, a number that had shrunk to 132 before the latest closures, largely due to closures linked to the Covid pandemic. Rivals like Domino's have surpassed Pizza Hut in global sales, with Domino's reporting $12.2 billion in global retail sales in FY2017 compared to Pizza Hut's $12.03 billion.

Despite its recent struggles, Pizza Hut holds a notable place in pop culture, particularly through its iconic advertising campaigns. In 1996, former England football stars Gareth Southgate, Stuart Pearce, and Chris Waddle appeared in a memorable advert, humorously referencing their penalty misses from Euro 1996. A year earlier, in 1995, Formula One personalities Damon Hill and commentator Murray Walker starred in an ad for Pizza Hut's stuffed crust pizza, where Hill playfully confronted Walker for his race commentary during their meal.