Papa John’s closing hundreds of restaurants in – Business News
Pizza chain Papa John’s mentioned it plans to close hundreds of underperforming restaurants in North America by the top of subsequent yr.
“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 mentioned final week during the company’s fourth-quarter earnings call.
Thanawala described the areas as being primarily franchise-owned, more than a decade previous and producing much less than $600,000 in annual gross sales (AUVs). He mentioned the bulk of the restaurants will shutter by the top of 2027, with about 200 closures taking place this yr.
“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 mentioned.
Roughly 200 closures will occur this yr. Bloomberg through Getty Images
He additionally mentioned that almost all 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.”
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The company reported a 5.4% decline in same-store gross sales in the fourth quarter, which CEO Todd Penegor mentioned “reflected a weak consumer backdrop and elevated promotional environment.”
The company reported a 5.4% decline in same-store gross 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 areas in its newest fiscal yr.
Rival pizza chain Pizza Hut additionally just lately introduced that it’s going to close 250 areas in the U.S. via June.
Ranjith Roy, the chief financial officer of Pizza Hut’s company guardian Yum! Brands, mentioned during an earnings call that the closures will primarily goal weaker-performing Pizza Hut restaurants as half of a broader effort to modernize the chain.
