KFC franchisee EYM Chicken closed more than two dozen of its restaurants in cities across Illinois, Indiana and Wisconsin, the latest in a string of closures for EYM-owned restaurants.
KFC confirmed EYM Chicken closed the locations it owns in those three states but did not provide the total number of units the franchisee shut down. Local news reports show at least two dozen KFC restaurants owned by EYM Chicken ceased operations. EYM Chicken had 47 KFC stores at the end of 2023, according to KFC’s franchise disclosure document filed in March.
“The decision to close a restaurant is always difficult for both the franchisee and the brand,” KFC said in a statement. “All other KFC locations in these states remain open to our guests.”
EYM Group, a multi-brand operator based in Irving, Texas, last year closed 26 Burger King stores it operated in Michigan under EYM King. Those closures came after Burger King sued the franchisee for violations of its franchise agreement, including failure to pay royalties.
In a notice sent in March 2023 to the Michigan Department of Labor and Economic Opportunity, EYM King Director Salvador Elias wrote the franchisee was ceasing operations in the state “due to unforeseen business circumstances and not being able to reach a resolution with Burger King Corporation.”
More recently, EYM Pizza closed 15 Pizza Hut restaurants in Indiana and in July filed for Chapter 11 bankruptcy protection amid ongoing disputes with the franchisor.
EYM sued Pizza Hut in March to keep the franchisor from terminating its franchise agreements, but a judge dismissed the complaint in April. That opened the door for Pizza Hut to file its own lawsuit in which it alleged non-payment of royalties and issues with store underperformance.
EYM Group and President Eduardo Diaz did not respond to requests for comment. EYM Group is also a Denny’s and Panera Bread franchisee.
Pizza Hut and KFC, both owned by Yum Brands, are among many restaurant companies that have faced weakening same-store sales and dwindling traffic in a tougher economic environment. Yum Brands CEO David Gibbs indicated during the company’s first quarter earnings call in May that efforts are underway to address issues with KFC U.S.
“The KFC brand in the U.S. has been struggling,” Gibbs said. “And I think we’re excited about some of the work that’s going on behind the scenes to really boldly reset the brand in the U.S.”
System sales at KFC are down 7 percent in the first half of the year.