NPC International, the owner of 1, 200 Pizza Shelter and nearly 400 Wendy’ s restaurants in the United States, offers filed for bankruptcy.

The franchisee continues to be dealing with a perfect storm associated with problems that led to its Section 11 filing on Come july 1st 1, including CCP (Chinese Communist Party) virus -related shutdowns, a massive debt problem of nearly $1 billion dollars, and rising labor plus food costs. Pizza Shelter, of which NPC is the company’ s largest franchisee, is struggling with sales recently.

NPC’ s dining places will continue to operate although it navigates the Chapter eleven process. The company employs almost 40, 000 people within 27 U. S. declares, according to its website.

In a statement in order to CNN Business, Pizza Shelter said the filing “ was expected” and continues to be supportive of NPC.

“ As NPC works through this process, all of us support an outcome leading to an organization with a lower, a lot more sustainable level of debt, possession focus on operational excellence and also a greater level of restaurant expense, ” a Pizza Shelter spokesperson said. The company additional that filing will “ strengthen the overall health and functionality of the entire system in the future. ”

Breakfast -Wendy' s
The Breakfast Baconator, Experienced Potatoes and Sausage Ovum and Cheese Burrito are usually part of the breakfast menu in Wendy’ s restaurants within New York City, on March two, 2020. (David Dee Delgado/Getty Images)

Pizza Hut, which is possessed by Yum! Brands, directed toward a recent filing showing that sales from its U. S. dining places open at least a year have got begun rebounding off their particular March lows. Pizza Shelter has 7, 100 dining places in the United States.

A Wendy' s restaurant
A banner launching Now Serving Breakfast will be shown outside a Wendy’ s restaurant in Nyc, on March 2, 2020. (David Dee Delgado/Getty Images)

Jon Weber, CEO of NPC’ s Pizza Hut department, said in a statement the organization will use Chapter 11 in order to “ evaluate and improve our restaurant portfolio to ensure that we are best positioned to fulfill the needs of consumers across the country. ”

NPC works only a small portion of Wendy’ s roughly 6, five hundred U. S. restaurants. The Wendy’ s spokesperson informed CNN Business said NPC’ s restaurants were “ generally performing very well” and the franchisee has held current with their financial obligations.

“ We anticipate that NPC will continue to be the productive member of the Wendy’ s family, and we will always stay closely coordinated plus support them moving forward, ” the burger chain mentioned.

NPC will be the latest US company arranging for bankruptcy during the COVID-19 pandemic. Chuck E. Cheese’ s parent company, GNC, 24 Hour Fitness, Neiman Marcus, J. Crew most of have filed in the past 8 weeks.

The particular CNN Wire and Epoch Times staff contributed for this report.