After 22 years in business, Marion Pizza Hut abruptly and permanently closed its doors Monday, shocking employees and community members alike.
Location manager Danyal Hamm got the news that morning along with three other employees.
“When we went in to start our day, a gentleman was standing there waiting for us,” Hamm said. “He said sales were not where they should be, and they had to shut it down.”
Taken off-guard, agitation ensued.
“Everybody was angry,” Hamm said. “A lot of things were said. I think we were all in shock; it was like pulling the rug out from underneath you and kicking you while you’re down.”
Hamm said about 13 employees, many of whom were high school students, lost jobs.
Signs were posted on the doors and a pre-recorded phone message states the business was closed “due to economic conditions.”
Dave Staab, president of Staab Management of Grand Island, Nebraska, the company that owns the store, confirmed the closure Tuesday. He explained the rationale behind a surprise closure.
“It’s always a really tough deal to tell people a week or two weeks before a closure,” he said. “Then you might have people react differently in a negative fashion, and it affects the quality of the restaurant.”
Owning 31 Pizza Hut locations in Nebraska, five in Minnesota, six in Missouri, and now 14 in Kansas, Staab said his company operates with many constraints in small towns like Marion.
“Our business is in rural America,” he said. “The last thing we want to do is close. Unfortunately, the model did not seem to work in Marion.”
In the six years Hamm managed the Marion location, she said business fluctuated but was steady enough that the peaks and valleys could be anticipated and adjusted to, but this year was different.
“It was crazy,” Hamm said. “It was like a roller coaster. Business would drop for a while, and then shoot right back up. It made it hard to staff.”
Wages also were an issue, Hamm said.
“Being in such a small town at a low volume store, I didn’t get the opportunity to pay employees what they deserved,” she said. “Many left for higher paying jobs.”
From a national advertising perspective, Staab said the franchise model is not really set up to be successful in rural America.
He said the incremental cost associated with operating the Marion location outweighed the viability of its future.
“There are a lot of outside pressures today that make it more difficult to run a restaurant [in a small town] than were there, say, 10 or 15 years ago,” Staab said.
He noted rising costs of employee healthcare, new laws dealing with salary and hourly rates, a rise in minimum wage in states like Nebraska, and fluctuating commodity prices as contributing factors to the closure.
“Pizza Hut as a brand is also contractually obligating stores to remodel,” Staab said. “You start putting all these factors together and begin to ask ‘Is the risk worth the reward?’”
Staab also closed a Pizza Hut on Sept. 21 in David City, Nebraska, a small town populated by about 1,000 more people than Marion, for similar reasons.
Staab noted that Hillsboro and Herington Pizza Huts were doing “very well” in the rural market.
“We just did a major remodel in Herington, and invested a lot of money there,” Staab said. “So we believe there is a future of profitability there.”
Mayor Todd Heitschmidt said a company that is not locally owned puts them at a disadvantage getting to know clientele, and he was optimistic that Marion Pizza Hut could be replaced with a different franchise food operation.
“It’s better to have one than not to have one, but that doesn’t mean we cannot be successful in attracting other national franchises,” Heitschmidt said. “While the national franchises have similar characteristics, they’re not all the same. There are markets like ours that other franchises would probably be interested in.”