Pizza chain Papa John’s said it plans to close hundreds of underperforming restaurants in North America by the end of next year.
“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 call.
Thanawala described the locations as being primarily franchise-owned, more than a decade old and generating 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 happening this year.
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“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.
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| PZZA | PAPA JOHN’S INTERNATIONAL INC. | 31.94 | +0.59 | +1.88% |
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.”
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Papa John’s operated 3,523 restaurants in North America as of the fourth quarter of 2025. It opened 96 new locations in its latest fiscal year.
Rival pizza chain Pizza Hut also recently announced that it will close 250 locations in the U.S. through June.
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Ranjith Roy, the chief financial officer of Pizza Hut’s corporate parent Yum! Brands, said during an earnings call that the closures will primarily target weaker-performing Pizza Hut restaurants as part of a broader effort to modernize the chain.
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