Image Source: CNN
In a significant shift within the fast-food pizza sector, Papa John’s recently announced the closure of approximately 300 locations in North America. This decision comes amidst a challenging business environment where customer spending is on the decline, reflected in the chain’s recent 5.4% drop in same-store sales.
During an earnings call on February 26, 2026, Ravi Thanawala, the chief financial officer and president of North America operations at Papa John’s, explained that the closures target restaurants failing to meet brand expectations or lacking a sustainable path to financial growth. Around 200 of these restaurants are set to close this year, with the remainder shut down by the end of 2027. However, specific details about the locations to be closed have not been released.
Challenges in the Pizza Industry: Papa John’s and Competitors
The decision to close locations is part of a broader trend seen across the pizza industry. Just earlier this month, Pizza Hut revealed plans to close about 250 locations as part of a strategic review by its parent company, Yum! Brands. This indicates an industry-wide struggle to adapt to changing consumer preferences and economic challenges, making it clear that even well-known brands are not immune to market pressures.
CEO Todd Penegor stated that the results from the previous quarter reflect “a weak consumer backdrop and elevated promotional environment,” underscoring the difficulties that many fast-food chains face today. In light of these challenges, Papa John’s is attempting to turn its fortunes around by focusing on improving its menu offerings. Recently, the chain introduced a new pan pizza, aiming to attract customers back to its restaurants.
Impact on Employees and Future Strategies
Along with the restaurant closures, Papa John’s has also made the difficult decision to reduce its corporate workforce by about 7%. This means approximately 50 positions will be eliminated as part of their efforts to streamline operations.
The company ended 2025 with about 3,500 locations, and while these closures indicate a major shift, they also reflect a need to refocus on long-term sustainability. By reallocating resources and refining their menu, Papa John’s hopes to regain footing in a competitive market that Domino’s Pizza currently dominates. Domino’s recently reported a 3.7% increase in same-store sales for the fourth quarter, aided by value offerings and a successful brand campaign.
Looking Ahead: The Future of Papa John’s
As Papa John’s embarks on this period of restructuring, it aims not only to survive but to thrive in the competitive pizza landscape. With the fast-food sector continuing to evolve, how Papa John’s adapts its strategy will be crucial to rekindling customers’ interests. The upcoming changes in location strategy and menu innovations will play a pivotal role in determining the brand’s future in an increasingly challenging market.
Frequently Asked Questions
Why is Papa John’s closing so many locations?
Papa John’s is closing about 300 locations due to underperformance and a decline in same-store sales, which fell by 5.4% last quarter.
How many locations does Papa John’s have currently?
As of the end of 2025, Papa John’s had approximately 3,500 locations, which will decrease significantly due to the closures.
What other pizza companies are closing locations?
Alongside Papa John’s, Pizza Hut has also announced plans to close around 250 locations amid a strategic review by Yum! Brands.
What strategies is Papa John’s considering for recovery?
Papa John’s is focusing on menu innovations, including introducing new products such as pan pizza, and aims to streamline operations to enhance profitability.
Who is the CEO of Papa John’s?
The current CEO of Papa John’s is Todd Penegor, who is leading the charge for the company’s turnaround strategy.
