Papa John's Closing Hundreds
Papa John's is closing hundreds of locations nationwide in a major shake-up for the pizza chain. The closures represent a significant downsizing as the company restructures its footprint amid changing consumer habits and delivery competition.
The move is part of a broader cost-cutting strategy that includes a 7% reduction in the corporate workforce. The company anticipates these measures will deliver at least $25 million in savings by 2027, with $13 million expected in 2026. This follows a period of declining financial performance, with total revenues of $2.1 billion in 2025 remaining flat from the previous year while net income fell from $84 million to $32 million. The closures will be staggered, with 200 locations shutting down in 2026 and another 100 by 2027. According to CFO Ravi Thanawala, the targeted restaurants are primarily franchise-owned, over a decade old, and generate average sales of less than $600,000 annually. The company aims to allow franchisees to redirect their resources to better-performing stores. This North American downsizing mirrors actions taken in the United Kingdom, where 74 Papa John's locations were closed in 2024. The UK arm of the company reported a pre-tax loss of £21.8 million for its most recent financial year, an increase from a £19.2 million deficit the prior year. Alongside store closures, Papa John's is also streamlining its menu. The company plans to eliminate its Papadia sandwich line and Papa Bites in the second quarter to improve efficiency, a move expected to impact same-store sales by 1.5%. The pizza industry is facing broad challenges, with competitor Pizza Hut also announcing the closure of 250 of its own underperforming locations in early 2026. These moves come as consumer spending habits shift and third-party delivery apps intensify competition in the market.
