Papa John's International, the global pizza chain, has unveiled a significant restructuring plan that will see the closure of hundreds of restaurants as it seeks to streamline operations and reduce costs. The company announced it will shutter 300 underperforming locations by the end of 2027, with 200 of those closures scheduled for this year alone.
Financial Performance and Strategic Shifts
Chief Financial Officer Ravi Thanawala disclosed the closures during a fourth-quarter earnings call on Thursday, February 26, 2026. He explained that the targeted restaurants are those "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." This move comes as Papa John's grapples with challenging financial metrics.
Sales at U.S. locations declined by 3 percent in the last fiscal year, with total revenues holding flat at $2.1 billion compared to 2024. The fourth quarter presented an even starker picture, with U.S. restaurant sales and total revenues, which stood at $498 million, both dropping by 6 percent year-over-year.
Corporate Workforce Reductions
In tandem with the restaurant closures, Papa John's is implementing a corporate workforce reduction. Thanawala confirmed that approximately 7 percent of corporate employees will be laid off. As of December 2024, the company employed about 700 corporate workers, indicating that around 49 positions are affected.
The specific locations slated for closure have not been publicly identified. The Independent has contacted Papa John's for further details on which restaurants will be impacted, but no additional information has been released at this time.
Expansion Amidst Contraction
Despite the closures and financial pressures, Papa John's continues to expand its global footprint. In the 2025 fiscal year, the chain opened 279 new restaurants worldwide. This includes 96 locations in North America and 183 in international markets, highlighting a strategic pivot towards growth abroad.
CEO Todd Penegor addressed the mixed results in a statement, noting, "In the fourth quarter, solid execution drove the company's fifth consecutive quarter of positive comparable sales in our International markets, while North America results reflected a weak consumer backdrop and elevated promotional environment."
Future Outlook and Transformation
Looking ahead to 2026, Penegor emphasized the company's commitment to transformation. "In 2026, we are focused on continuing our transformation work to best position Papa John's to win in a dynamic QSR [quick service restaurant] category," he stated. This suggests a broader strategy to adapt to competitive market conditions while optimizing the restaurant portfolio.
Founded in 1984 in Jeffersonville, Indiana, Papa John's has grown into a major player in the fast-food industry, with roughly 6,000 restaurants across about 50 countries and territories. Approximately 3,500 of these are located in the United States. The current restructuring reflects efforts to strengthen profitability and operational efficiency in a challenging economic landscape.
