Papa Johns International, Inc. has announced plans to close 300 underperforming restaurants across North America by the end of 2027 as part of a strategic transformation to improve system-wide profitability.
The closures will primarily affect franchisee-owned units that are more than 10 years old, generate average annual sales under $600,000, and typically operate at a loss. Approximately 200 locations are expected to close this year, with the remainder shutting by 2027.
The company has also cut 7 percent of its corporate workforce to streamline operations and better align resources with its transformation priorities. Papa Johns continues to refranchise corporate-owned restaurants, recently selling 85 units and negotiating deals for 29 more in the Southeast.
In a statement accompanying the earnings release, President and CEO Todd Penegor acknowledged challenges in the domestic market but struck a cautiously optimistic tone about the company’s direction: “These actions provide a strong foundation for our future, reinforcing our brand health, sharpening our value proposition, and enhancing the customer experience.”
CFO Ravi Thanawala added: “Select strategic closures will allow franchisees to redirect resources to drive operational excellence in core restaurants and accelerate growth in priority markets.”
Despite the closures, Papa Johns expects to open 40–50 new restaurants in North America in 2026. The company also plans to simplify its menu by removing items like Papadias and Papa Bites and is upgrading its digital platforms and point-of-sale systems.
The move mirrors trends in the pizza industry, where competitors such as Pizza Hut are also reducing store counts to focus on profitable locations.
Papa Johns operates over 3,500 locations in North America and more than 6,000 units worldwide, with a growing emphasis on franchising to expand efficiently.
