Pizza chain Papa John’s has announced it will shut down approximately 200 restaurants in 2026, with hundreds more expected to close by the following year.
The company’s CFO and President of Papa Johns, Ravi Thanawala, outlined the plans for “select closures” during an earnings call last week.
“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, as well as locations where we can effectively transfer sales to nearby restaurants,” he said.
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The strategy is designed to strengthen the financial situation of franchisees, according to Thanawala. By closing underperforming outlets, the company hopes to encourage franchisees to invest in opening new restaurants in more priority locations.
While a company representative could not confirm which specific locations are slated for closure, Thanawala provided details on the characteristics of the affected restaurants.
“These locations are primarily franchise-owned, over a decade old, generate [average unit volumes] of under $600,000, and mostly operate at negative 4-wall EBITDA,” he said.
EBITDA is an acronym for “earnings before interest, taxes, depreciation and amortization,” while “4-wall” refers to expenses specific to each particular restaurant.)
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The closures represent a significant reduction in Papa John’s North American footprint. As of the end of 2025, the company operated 3,523 restaurants in the region, having opened 96 new locations during the year.
The restructuring announcement follows a challenging fourth quarter for the company as Papa John’s reported revenues of $498.2 million for the final quarter of 2025, a decline of more than $30 million compared to the same period the previous year.
The news comes on the heels of a similar announcement from Pizza Hut, which is set to close 250 U.S. locations by mid-2026.
With information from KTLA.
