The renowned fast-food giant Pizza Hut has found itself entangled in a legal battle after its major U.S. franchisee, Chuck E. Cheese's Northeast Pizza Company, filed a lawsuit against the corporation. The franchisee alleges that the mandatory implementation of the AI-driven delivery management platform, DragonTail, at its stores has led to significant operational disruptions. The franchisee, which operates around 111 outlets, reported a drastic downturn in business following the system's introduction, culminating in losses exceeding $100 million.

System malfunctions prompted delivery riders to hoard orders, thereby diminishing delivery efficiency and sparking widespread consumer dissatisfaction. Moreover, riders began selectively rejecting orders due to tipping-related issues, causing the sales growth rate in core markets to plummet from positive to negative.

A Pizza Hut spokesperson has stated that the company will address these allegations through the appropriate legal channels. At present, Pizza Hut's performance in the U.S. market remains lackluster, with its parent company announcing plans to shutter 250 stores in the first half of the year.