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Cramer: Your Favorite Restaurant 'Can't Survive On Delivery Alone'

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The restaurant industry is in big trouble after Yum! Brands, Inc. (NYSE: YUM) reported second-quarter results that signal it's not worth the effort to reopen its Pizza Hut brand, CNBC's Jim Cramer said last Thursday on "Mad Money."

What Happened: Yum Brands is the largest restaurant company in the world and Pizza Hut is its largest division, Cramer said. Yet despite tens of thousands of stores remaining closed for dining-in options, the pizza chain still reported a same-store sales growth of 5% in the U.S.

Yum Brands as a whole reported a 15% decrease in global same-store sales in the second quarter. EPS of 82 cents beat estimates of 54 cents in the quarter while revenue of $1.2 billion also topped estimates of $1.19 billion.

Management took the time to detail all the safety protocols it has in place for the few Pizza Hut chains that are open during the post-earnings conference call, Cramer said. But management may soon jump to the conclusion it isn't worth the effort to have any stores open for dine-in.

Why It's Important: The problem for the industry is the vast majority of restaurants aren't built for take-out and delivery options like Pizza Hut is, Cramer said. Even among those that do offer delivery and take-away, the off-premise sales is not enough.

"Unfortunately, your favorite sit-down restaurant probably can't survive on delivery alone," Cramer said.

Cramer is no stranger to the restaurant industry as he owns the Bar San Miguel in Brooklyn and co-owns another called The Longshoreman.

"If you're in the business of serving people food in a brick-and-mortar setting, all I can say is stick a fork in it, because that business is done," Cramer said.

This isn't to say that each and every restaurant will close although the prospects may become more dire as time passes. If the White House's next round of stimulus measures doesn't directly address saving independent restaurants above and beyond a paycheck protection program.

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