Struggling Pizza Hut chain will be sold by Yum! Brands in $2.7 billion deal

The move completes Yum!’s previously announced strategic review of Pizza Hut - (Getty Images)

Struggling restaurant chain Pizza Hut is set to be sold by its parent company, Yum! Brands, in a deal valued at $2.7 billion.

Private equity firm LongRange Capital is buying Pizza Hut, excluding the mainland China business, for about $1.5 billion, the company said Tuesday. The mainland China Pizza Hut will be purchased by Yum China Holdings Inc. for approximately $1.2 billion.

The sale follows a period of significant challenges for the brand, as outdated restaurant locations and intense competition in the fast-food sector led to a decline in sales.

Yum! Brands, which also owns KFC and Taco Bell, said in February that it was considering selling the chain as it announced the closure of 250 underperforming locations in the United States.

Pizza Hut was founded in Wichita, Kansas, in 1958, and was part of PepsiCo before being spun off into Yum! Brands in 1997.

Yum! Brands expects both transactions to close in the third quarter (AP Photo/Gerald Herbert)

The chain has nearly 20,000 stores in more than 100 countries, but the company gets nearly half its sales from the U.S., where it has about 6,500 stores.

The company launched a strategic review of Pizza Hut in November, prompted by declining sales at comparable stores.

Pizza Hut has also been dealing with fallout from an AI rollout after a franchisee sued the chain, saying the new system caused it to lose $100 million.

The franchisee, which operates more than 100 Pizza Hut restaurants in Maryland, Pennsylvania, New York, New Jersey and Washington, D.C., said more than 90 percent of its deliveries arrived within 30 minutes before the new AI system was implemented.

DoorDash delivery drivers were able to see when pizzas would come out of the oven after the AI rollout, the lawsuit said. Drivers would then wait up to 15 minutes for multiple orders to be ready before grabbing them, slowing down delivery, the lawsuit alleged.

Chris Turner, CEO of Yum Brands, expressed optimism about the future after Tuesday’s sale announcement.

"Under LongRange and Yum China, Pizza Hut will be well positioned for future growth with ownership that brings deep expertise in the restaurant industry,” he said.

Yum!’s Board of Directors unanimously approved the sale and the company expects both transactions to close in the third quarter of 2026.