Papa John’s to Close 300 North American Stores by 2027

Papa John’s has announced plans to permanently close approximately 300 locations across North America by the end of 2027. This strategic move aims to eliminate underperforming stores as the company grapples with financial challenges in its home market. Notably, these closures will primarily impact the United States and Canada, with no effect on operations in the UK, where the brand is currently thriving.

The decision to shutter these establishments comes amid reports of “negative EBITDA” at many locations, indicating that they are consistently losing money. During a fourth-quarter earnings call, CFO Ravi Thanawala stated, “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.” This assessment highlights the economic pressures facing the chain in its North American sector.

The closure plan includes a phased approach, with around 200 locations expected to close in 2026, while the remaining 100 stores will close by the end of 2027. CEO Todd Penegor emphasized that this strategy is intended to enhance the overall health of the brand’s franchise system. He remarked, “We believe these closures will further strengthen the system,” indicating a shift towards more profitable growth and modernization of operations.

While the North American market presents challenges, the situation across the Atlantic is markedly different. The UK division of Papa John’s has reported a significant 7% increase in comparable sales, attributed to a recent transformation effort. This resurgence follows a proactive strategy that involved closing underperforming sites in 2024, allowing the UK branch to rebound effectively.

Managing Director Chris Phylactou recently confirmed that the UK division is “no longer losing money” and has transitioned back to an expansion mode. The successful brand relaunch, coupled with improved partnerships with delivery services and a renewed focus on customer service, has driven the division’s strongest quarterly performance since the pandemic.

As Papa John’s navigates these contrasting landscapes, the company remains committed to refining its operations and enhancing the customer experience. The closures in North America reflect a broader effort to ensure the brand’s sustainability, while the successful growth in the UK serves as a testament to effective strategic adjustments.