Papa John’s closing hundreds of restaurants in major shake up

Papa John’s closing hundreds of restaurants in major shake up

Pizza chain Papa John’s said it plans to shut hundreds of underperforming restaurants in North America by the end of next 12 months.

“We have identified approximately 300 underperforming restaurants across North America that are not meeting brand expectations or lack a clear path to sustainable financial improvement, as well as locations where we can effectively transfer sales to a nearby restaurant,” Papa John’s Chief Financial Officer Ravi Thanawala said last week during the company’s fourth-quarter earnings name.

Thanawala described the places as being primarily franchise-owned, more than a decade previous and producing less than $600,000 in annual sales (AUVs). He said the majority of the restaurants will shutter by the end of 2027, with about 200 closures taking place this 12 months.

“We believe these closures will further strengthen the system, increasing AUVs by at least 3% and improve franchisee health by allowing franchisees to reallocate resources towards operational excellence in their remaining restaurants and open units in priority markets,” Thanawala said.

Roughly 200 closures will occur this 12 months. Bloomberg by way of Getty Images

He also said that the majority of the company’s restaurants worldwide have “performed well over the years and delivered strong returns for both corporate and franchise owners,” and that the strategic closure of underperforming restaurants are “among the most impactful actions we can take to improve restaurant profitability and fleet health.”

The company reported a 5.4% decline in same-store sales in the fourth quarter, which CEO Todd Penegor said “reflected a weak consumer backdrop and elevated promotional environment.”

The company reported a 5.4% decline in same-store sales in the fourth quarter. Getty Images

Papa John’s operated 3,523 restaurants in North America as of the fourth quarter of 2025. It opened 96 new places in its latest fiscal 12 months.

Rival pizza chain Pizza Hut also not too long ago announced that it’s going to shut 250 places in the U.S. via June.

Ranjith Roy, the chief monetary officer of Pizza Hut’s company dad or mum Yum! Brands, said during an earnings name that the closures will primarily goal weaker-performing Pizza Hut restaurants as half of a broader effort to modernize the chain.

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