Yum! Brands (YUM  ) was delivered a considerable blow after one of the company's largest franchisees filed for bankruptcy. A recent agreement between Yum! and the franchisee will see one-fifth of all Pizza Hut locations either close.

Major Yum! Brands franchisee NPC International filed for chapter 11 bankruptcy back in July. The franchisee operates 1,200 Pizza Hut and 400 Wendy's restaurants, which have remained open as the company attempted to settle its bankruptcy. NPC announced an agreement with Yum! on Monday that will see a quarter of its considerable number of stores close, with the remainder being sold off.

The company listed several factors in its bankruptcy filing. In addition to a coronavirus related financial pinch, NPC suffered from a rise in material and labor-related costs, as well as a growing debt almost reaching $1 billion. Of its stores, NPC noted that its 300 stores destined to close underperformed; the low performance was not boding well with a years-long decline in the performance of NPC's restaurants.

Interestingly, NPC also named Yum! Brands as one of the factors in their decline.

"Deteriorating brand recognition has been further exacerbated by decreased menu innovation and the lack of a clear, long-term strategy by the Pizza Hut Franchisor to address the brand issues to provide a clear and differentiated identity." NPC said.

While it's hard to verify if Yum! Brands or Pizza Hut are entirely to blame for NPC's troubles, it's worth noting that Pizza Hut's market share appears to be under threat. While Pizza Hut had dominated the market for years, they were surpassed in 2019 by Dominos (DPZ  ), which has seen an enormous resurgence since its rock bottom performance in 2008. Dominos outperformed Pizza Hutt by $1.48 billion.

Dominos' success in surpassing Pizza Hut was primarily due to the company's considerable push to digital ordering and its investment in internet infrastructure, allowing customers ease of ordering across internet-enabled devices. While Pizza Hut has done the same, Dominos has been far more efficient in growing its digital infrastructure.