This Pizza Chain is Quietly Closing Dozens of Restaurants

Papa John's is shuttering up to 70 North American restaurants by year's end as the pizza chain battles declining sales and fierce competition from Domino's and Pizza Hut.

The closures represent about 2% of Papa John's 3,516 North American locations—a move the company frames as "normal maintenance" despite posting a 2.7% drop in same-store sales during the first quarter.

Not Just Business as Usual

Every restaurant chain closes underperforming locations. Starbucks routinely shutters hundreds of stores annually while still growing its total footprint. But Papa John's situation feels different.

While the company opened 18 new U.S. restaurants in Q1, it closed 16—barely treading water. CFO Ravi Thanawala tried spinning the numbers positively, noting that monthly sales improved throughout the quarter and transactions were down "less than 1%."

That's like celebrating that your house fire is spreading slower than expected.

The Numbers Tell the Story

Papa John's expects to close between 53 and 70 North American locations this year, returning to what Thanawala called their "historical average" of 1.5% to 2% closures. They plan to open 85 to 115 new restaurants, meaning they'll be net positive—but just barely.

The international picture looks worse. In Q1, they opened 29 restaurants globally but closed 42. Last year, they shuttered 155 international locations, including 73 "strategic closures" in the UK. Strategic closure is corporate speak for "these stores were bleeding money."

Fighting From Behind

CEO Todd Penegor acknowledges Papa John's is the underdog, calling it a "challenger fighter brand" against dual champions Domino's and Pizza Hut. His strategy? Lean into quality messaging and value pricing.

"Things like six simple ingredients on our original dough and the real cheese from mozzarella and pizza sauce from vine to sauce in 24 hours, those things matter," Penegor said during the earnings call.

The problem? Consumers apparently don't care enough about ingredient quality when Domino's delivers faster and Pizza Hut offers stuffed crust.

The Real Problem

Papa John's faces the classic third-place dilemma. Domino's dominates delivery speed and technology. Pizza Hut owns the nostalgia and variety game. Papa John's "better ingredients, better pizza" tagline feels dated when everyone's ingredients have improved.

The company is shifting marketing from traditional TV to social media, trying to connect with younger consumers. But reaching Gen Z won't matter if your fundamental value proposition—slightly better ingredients at similar prices—doesn't resonate.

Penegor believes pizza offers good value for families feeding "three or four at a very affordable price." True, but that applies to every pizza chain. The real question people need an answer to is what makes Papa John's special?

The Franchise Factor

These closures hit franchisees hardest. While corporate spins store shutdowns as optimization, individual owners lose their investments. The company hasn't disclosed how many closures are company-owned versus franchised, but historically, franchisees bear the brunt.

International franchisees seem particularly vulnerable. Those 73 UK closures last year? Someone lost money on every single one. The pattern continues globally as Papa John's retreats from markets where it couldn't compete.

What's Next

Papa John's insists things are improving. They point to sequential monthly improvements and transaction trends. They're investing in "transaction-driving initiatives"—corporate speak for discounts and deals.

The reality is stark. In a brutally competitive pizza market, being third place means fighting for scraps. Closing 2% of stores might be "normal," but when you're already struggling, normal isn't good enough.

The company needs more than quality messaging and social media pivots. It needs a reason for consumers to choose Papa John's over established competitors. Six ingredients in the dough won't cut it when Domino's arrives in 20 minutes.

The Bottom Line

These aren't strategic rightsizing moves by a healthy company. They're retreats by a chain that can't figure out its place in the modern pizza landscape.

Papa John's remains profitable, and 70 closures won't sink the company. But without a compelling answer to "why Papa John's?" these closures might be the beginning of a longer, slower decline.

For now, check if your local Papa John's made the cut. In this pizza war, being the quality-focused third option might not be enough to survive.