Papa Johns is preparing to close hundreds of underperforming locations across North America as the company attempts to rebound from its recent sales slump.
On Thursday, Papa Johns released its annual financial results, revealing that North American same-store sales fell by 5.4 in the fourth quarter and were down 2.5 percent over the past year.
In a subsequent earnings call, Chief Financial Officer Ravi Thanawala said that the company had 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.”
Newsweek contacted Papa Johns via email outside of regular hours for comment.
Why It Matters
According to recent filings, Papa Johns operates around 3,500 restaurants as of the end of 2025, meaning the closures could impact around 9 percent of its total locations.
And the move comes amid a difficult period for other American pizza firms, with rival Pizza Hut announcing earlier this month that it would be shuttering around 250 locations in the first half of 2026.
What To Know
On Thursday, CEO Todd Penegor that the company’s North American results “reflected a weak consumer backdrop and elevated promotional environment.”
While international sales rose 5 percent in 2025, total revenues were down slightly to $2.1 billion as net income fell by 62 percent to $32 million.
But Penegor said the company was “encouraged” by the progress being made in reinforcing its “brand health,” and said that recent changes are expected to “provide a strong foundation for our future.”
Papa Johns did not provide a list of the doomed locations, but said that these are “primarily franchise-owned, over a decade old” and generate annual sales of under $600,000.
In addition to the closures, Papa John’s said it had laid off around 7 percent of its corporate workforce in 2025.
What People Are Saying
Papa Johns CFO and North America President Ravi Thanawala said: “We believe these closures will further strengthen the system, increasing [average unit volumes] by at least 3 percent and improve franchisee health by allowing franchises to reallocate resources towards operational excellence in their remaining restaurants and open units in priority markets.”
Todd Penegor, President and CEO, said in a statement: “In 2026, we are focused on continuing our transformation work to best position Papa Johns to win in a dynamic [quick serve restaurant] category. Our strong balance sheet is supporting investment in these initiatives, which we believe will deliver high returns. We look forward with confidence in our ability to generate sustainable, profitable growth, and value creation.”
What Happens Next
Papa Johns said it expects to close the majority of the affected locations by the end of 2027, with 200 closures occurring in 2026. The company said it would also be opening between 40 and 50 restaurants in North America this year.
Regarding its financial outlook, Papa Johns said it expects North American sales to drop by between 2 and 4 percent in 2026.
