Papa Johns is scaling back its footprint as ongoing economic pressure and changing consumer behavior continue to weigh on the restaurant industry. The pizza chain recently confirmed plans to close hundreds of underperforming locations, marking one of its most significant contraction efforts in years.
Hundreds of locations set to close
Papa Johns plans to shutter approximately 300 restaurants by the end of 2027, primarily affecting underperforming and overlapping markets. While the company has not released a full list of closures, the move is expected to impact primarily franchised stores, according to the company’s CFO.
The closures are part of an effort to streamline operations and refocus on profitable locations as sales growth slows across the quick-service restaurant sector.
Corporate layoffs accompany store shutdowns
In addition to restaurant closures, Papa Johns is also cutting about 7% of its corporate workforce – or around 700 employees. The company said the reductions are designed to simplify its organizational structure and reduce costs amid a challenging operating environment.
The moves come after a February earnings call, revealing that sales have declined by 5.4%. Regarding the store closures and corporate layoffs, Papa Johns CEO Todd Penegor said, “These actions, alongside recent changes to our organizational structure to drive efficiencies, provide a strong foundation for our future.”
Why Papa Johns is pulling back
Like many restaurant chains, Papa Johns has been navigating higher labor costs, elevated food prices, and cautious consumer spending. Customers have increasingly pulled back on discretionary dining, especially delivery and takeout orders, which surged during the pandemic but have since cooled.
The brand has also faced intense competition from both national pizza rivals and value-focused local operators, putting pressure on margins.
What comes next for the brand
Despite the closures, Papa Johns says it remains committed to growth through menu innovation, digital ordering improvements, and targeted expansion in stronger markets. Leadership maintains that reducing weaker locations will ultimately strengthen the brand’s overall performance.
The move underscores a growing trend in the restaurant industry, where even well-known chains are reassessing scale in favor of profitability.
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