The last Pizza Hut in downtown Minneapolis is preparing to close its doors, marking the end of an era for a once familiar fixture of the city center.

In its place, a marijuana dispensary is scheduled to open.

This transition is not symbolic or hypothetical.

It is the direct result of a long chain of regulatory decisions that reshaped how businesses operate in Minneapolis and ultimately altered the economic makeup of its downtown core.

The Pizza Hut located on Hennepin Avenue had operated for years as a casual sports bar style restaurant, serving pizza, wings, and beer to office workers, sports fans, and residents.

It was not a luxury destination or a culinary landmark.

It was reliable, affordable, and accessible.

Yet by early 2026, it will be gone.

The lease expires in February, and the building has already been sold to a company specializing in cannabis retail.

The closure traces back to a policy decision made nearly a decade earlier.

In May of 2016, the Minneapolis City Council passed the Sick and Safe Time Ordinance.

At the time, it was the first law of its kind in the Midwest.

The ordinance required businesses with six or more employees to provide one hour of paid sick leave for every thirty hours worked.

Employees could accrue up to forty eight hours per year and carry over as many as eighty hours.

On its surface, the policy appeared straightforward.

However, the complexity lay in its scope.

The ordinance did not limit itself to businesses physically located within Minneapolis.

It applied to any business whose employees worked inside city limits, even briefly.

This meant that a delivery driver entering Minneapolis for a single route or a contractor working one day on a downtown site could trigger compliance requirements for an employer based far outside the city.

This extraterritorial reach immediately raised concerns within the business community.

The Minnesota Chamber of Commerce filed a lawsuit before the ordinance was fully implemented.

The case argued that the city was overstepping its authority by regulating businesses beyond its jurisdiction and by conflicting with existing state level sick leave laws.

In January of 2017, a Hennepin County judge issued a partial ruling.

The court allowed the ordinance to take effect for businesses located within Minneapolis but blocked enforcement against employers based elsewhere.

The city appealed the decision, and what followed was a prolonged legal battle that moved between district court and the court of appeals for several years.

In June of 2020, the Minnesota Supreme Court issued its final ruling.

In a five to two decision, the court sided with the city.

 

The majority held that Minneapolis could regulate any employee who worked at least eighty hours within city limits, regardless of where the employer was located.

The dissent warned that the decision would subject businesses across the state to a patchwork of municipal regulations based on employee movement rather than business location.

With the legal uncertainty resolved, enforcement began in earnest.

In 2019, the Minneapolis Department of Civil Rights launched an investigation into the Pizza Hut franchise on Hennepin Avenue.

The findings were clear.

Not a single employee had received paid sick leave during that year.

The franchise was found to be in full violation of the ordinance.

The owner, Muy Pizza Minnesota LLC, operated multiple Pizza Hut locations in the region.

The city gave the company a choice between settlement and further enforcement action.

The franchise opted to settle.

In December of 2019, it agreed to pay thirty three thousand six hundred thirty dollars in back wages to forty three current and former employees.

City officials publicly framed the settlement as a success.

They described it as proof that enforcement was protecting workers and holding businesses accountable.

What was not emphasized was the broader context.

The ordinance had only recently become fully enforceable following years of litigation.

Many businesses were still adjusting to compliance requirements that had shifted repeatedly during the legal process.

Pizza Hut was not alone.

On the same day the city announced the Pizza Hut settlement, it also disclosed a settlement with a Potbelly Sandwich Shop located in the IDS Center.

That case resulted in a nineteen thousand dollar payout.

Combined, the two cases returned more than fifty three thousand dollars to roughly one hundred workers.

The city reported that nearly eighteen hundred workers gained access to sick and safe time benefits as a result of enforcement actions that year.

What the data did not capture was the number of businesses that quietly reassessed their presence in Minneapolis.

It did not track franchises that canceled expansion plans, delivery companies that rerouted drivers to avoid compliance thresholds, or restaurants that chose suburban locations instead of downtown storefronts.

Increased regulatory pressure was not the only challenge facing Pizza Hut in Minnesota.

In June of 2022, a delivery driver filed a federal lawsuit alleging that the franchise under reimbursed drivers for vehicle expenses.

The complaint argued that a flat rate reimbursement failed to cover gas, insurance, maintenance, and depreciation.

The lawsuit applied to Minnesota drivers and named both the original franchise operator and its successor.

In March of 2024, the plaintiff sought court approval for a four point five million dollar settlement.

A separate but related lawsuit filed in Georgia expanded similar claims to multiple states, including Florida, Texas, and Wisconsin.

The combined settlement for both cases reached four point seven five million dollars.

Although the company did not admit wrongdoing, the financial impact was substantial.

Between sick leave enforcement and delivery driver litigation, operating a Pizza Hut in Minnesota became increasingly expensive and legally complex.

In September of 2025, the building housing the Hennepin Avenue Pizza Hut was sold for one point five million dollars.

The buyer was a Louisiana based businessman operating cannabis retail businesses under the Cali Smoke Shop and Cali CBD and Vape brands.

With Minnesota legalizing recreational cannabis in 2023, non tribal dispensaries began opening across the Twin Cities in late 2025.

Downtown Minneapolis already had one licensed cannabis retailer.

The conversion of the Pizza Hut site will add another.

At the same time, the city will lose one more restaurant.

The closure reflects broader trends in Minneapolis.

The city now has one of the highest minimum wages in the Midwest at fifteen dollars and ninety seven cents per hour.

Minnesota does not allow a tip credit, meaning restaurants must pay servers the full minimum wage before tips.

The state also prohibits mandatory tip pooling and does not allow service fees, a policy unique in the nation.

Between 2019 and 2024, restaurant wages in Minnesota rose by approximately thirty percent.

These increases occurred alongside additional compliance costs tied to sick time ordinances, wage theft prevention laws, and varying municipal regulations.

The results are visible in licensing data.

In 2019, Minneapolis had two thousand nineteen active restaurant licenses.

By 2024, that number had fallen to one thousand eight hundred forty four, representing an eight point seven percent decline in five years.

Many of the closures have involved long standing local institutions.

Restaurants with decades of history have shut down.

Award winning establishments have announced permanent closures.

Bar owners and restaurateurs consistently cite rising labor costs, declining foot traffic, and regulatory burdens as factors that made continued operation unsustainable.

Industry consultants now routinely advise new restaurant operators to avoid Minneapolis altogether.

Suburban cities such as Woodbury, Maple Grove, and Plymouth are increasingly viewed as safer alternatives with lower rents and fewer regulatory complications.

The Pizza Hut story illustrates the cumulative effect of these pressures.

Minneapolis fought for years in court to establish its regulatory authority.

It succeeded.

It enforced its ordinance.

It collected settlements.

Yet the outcome is a vacant restaurant and displaced workers.

Forty three employees received back pay years ago.

Today, they face job loss.

The city gains a cannabis retailer but loses a food service employer, along with the associated jobs, tax revenue, and daily foot traffic.

Each restaurant closure reduces the density and vitality of downtown life.

Each business that chooses the suburbs represents a silent referendum on the city business climate.

Minneapolis may have won its legal battles, but the economic consequences continue to unfold in empty storefronts and changing streetscapes.

As the final Pizza Hut prepares to serve its last slice, the transformation of its location stands as a tangible reminder of how policy decisions reverberate far beyond courtrooms and council chambers.

The city enforced the rules.

The businesses responded.

And downtown Minneapolis is being reshaped, one closure at a time.