Pizza Hut Quietly Added an Extra Service Fee In This State
Doing business in California has never been cheap, but in recent months, the costs companies face in the Golden State have increased ever more rapidly. Already faced with high taxes and lots of regulations, California businesses are now feeling pressure from demands for higher wages and higher costs of materials brought on by global and domestic supply chain issues.
So what is Pizza Hut doing to offset its higher costs of operating there? They're charging more for pizza. And pasta. And breadsticks. And everything else they sell to customers placing delivery orders—the chain is now simply charging customers a "service fee" on every delivery order placed, according to The Los Angeles Times. In some cases, that fee may be less than a dollar, in others, it's more; there seems to be no fixed cost across locations.
The fee is separate from a delivery fee, which the chain has implemented years ago. According to a lawsuit filed by former employees, Pizza Hut's delivery fee doesn't go directly to the delivery person but is just another way to boost the company's profits. That's exactly the case with the new "service fee," which seems to be nothing more than a price increase footed by the customer.
Some customers have begun to notice the upcharge months ago. For example, one post in the r/pizzahut subreddit said: "…after I put a pizza in my shopping cart when checking out they add another $1.09 as a 'service fee' due to the cost of doing business in California. Now, isn't this all deceptive pricing, and has anyone checked if this is legal, to offer one price then load up on service fees…?"
There are currently around 525 Pizza Hut locations in California, making it the state with the second-highest number of the brand's locations, following only Texas, which has more than 650. This footprint is the result of the closure of hundreds of stores nationwide over the past few years in a bid to stabilize the chain following the bankruptcy of a major franchise operator, NPC International, in the summer of 2020.
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