Papa Johns announces 300 store closures and 7% corporate layoffs

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Papa Johns has announced respective outgo savings and fiscal betterment measures for 2026 and beyond, including 300 closures of underperforming stores by 2027 (with 200 closing this year), and 7% firm layoffs. 

The pizza concatenation is present successful twelvemonth 2 of its translation program nether CEO Todd Penegor and is looking to equilibrium outgo savings with “recruiting caller customers to the brand,” Penegor said during Thursday’s Q4 net call. 

“We person conducted a broad reappraisal of non-customer facing costs arsenic good arsenic our firm and tract resources to make incremental flexibility crossed the company, further fortify execution, and enactment profitable semipermanent growth,” Penegor said. “Together with the conscionable reviewed actions to optimize our edifice portfolio, we expect this programme to present astatine slightest $25 cardinal successful outgo savings extracurricular of selling done 2027 with astir $13 cardinal expected to beryllium realized successful 2026.”

Papa Johns reported a 2% diminution successful North America same-store income driven by a show downturn of company-owned stores, and balanced retired by a 5% summation successful planetary same-store sales. In effect to these challenges, the institution besides announced plans to accelerate its refranchising program, with a semipermanent extremity of reducing company-owned stores to mid-single digit percent of its full portfolio.

“Optimizing our edifice portfolio and strategically closing underperforming restaurants are among the astir impactful actions we tin instrumentality to amended edifice profitability and fleet health,” Papa Johns CFO Ravi Thanawala said during Thursday’s net call. “We person identified astir 300 underperforming restaurants crossed North America that are not gathering marque expectations oregon deficiency a wide way to sustainable fiscal improvement. … These locations are chiefly franchise-owned, implicit a decennary old, and make AUVs of nether $600,000.”

To equilibrium retired these closures, Papa Johns has a semipermanent extremity of improving franchisee profitability and volition absorption connected planetary maturation successful the twelvemonth ahead, with a extremity of opening 180 to 220 gross caller restaurants crossed each markets successful 2026.

In summation to cost-savings, Papa Johns is besides simplifying its paper by phasing retired some the Papadias (flatbread sandwich introduced successful 2020) and Papa Bites (bite-sized dough balls introduced successful 2022) platforms that person been added to and expanded upon implicit the years. 

“We expect that this paper revision volition insert near-term unit connected 2026 North America comparable sales, but yet payment the marque arsenic we amended operations and turn income of products extracurricular of halfway pizza, arsenic the payment of our reinvigorated innovation pipeline builds,” Thanawala said.