Restaurant India News: Papa Johns to Close 300 Stores in Major Restructuring Push

Papa Johns is starting a major restructuring plan to deal with two years of weak sales and improve profits across North America. 

The Atlanta-based pizza chain said on Thursday that it will shut down 300 underperforming restaurants by the end of 2027, with nearly two-thirds of those closures planned for this year.

Speaking during the company’s fourth-quarter earnings call, CEO Todd Penegor said the closures are part of a broader effort to strengthen system-wide performance and improve average-unit volumes (AUVs). 

The majority of the affected outlets are franchisee-owned and generate less than $600,000 in annual sales. CFO Ravi Thanawala added that these restaurants also report negative EBITDA, making them financially unsustainable.

In addition to trimming its store footprint, Papa Johns will cut 7% of its corporate workforce as part of an organizational overhaul aimed at simplifying operations and improving efficiency. 

The company is targeting at least $25 million in cost savings outside of marketing by 2027, including $13 million this year alone.

The restructuring will also extend to the menu. Papa Johns plans to discontinue Papadias and Papa Bites in the second quarter to reduce operational complexity. 

“We took a thoughtful approach to the closures and conducted a full review,” Penegor said, adding that the company examined trade areas that had deteriorated or required significant reinvestment. He described the strategy as an opportunity to strengthen four-wall profitability and lift overall AUVs across the system.

The announcements follow a 5% decline in North American same-store sales in the fourth quarter, extending a period of sluggish performance not seen since 2018 and 2019, when the brand grappled with controversy surrounding founder John Schnatter.

Looking ahead, the chain is testing oven-toasted sandwiches while doubling down on its core pizza offerings. Executives said pizza volumes rose 4% in 2025, and the recently launched pan pizza has performed above expectations, offering a potential bright spot amid the turnaround effort.