Papa John’s plans to close dozens of U.S. locations in 2025 as part of a broader effort to improve profitability following declining same-store sales. The chain expects up to 70 North American restaurants to shutter by the end of the year.
Even really successful restaurant chains close locations every year. That's normal as rents increase, populations shift, and markets that were once viable no longer make sense.
Starbucks does this pretty much every year. The coffee chain will close hundreds of locations, usually in line with when their leases end.
This is basically normal maintenance, and at a growing chain, it's not a real concern. Starbucks, for example, has grown its store count in the United States every year.
In 2015 the chain had 12,521 U.S. locations, which grew each year coming in at 15,328 in 2020 and roughly 17,166 right now. Growth numbers varied each year, but the number of new stores opening was always larger than the amount of stores the chain closed.
Closing restaurants, even for a struggling chain, is simply part of doing business. Papa John's (PZZA) , which has faced significant global challenges, has been closing stores nationwide and globally, but that might be considered a good thing.
The Domino's and Pizza Hut rival has been struggling, although it argues that things are improving.
North America comparable sales decreased 2.7% in the first quarter of 2025 compared with the prior year quarter.
“We are also encouraged that comp sales improved sequentially each month throughout the first quarter. North America transaction comps were down less than 1% when compared with the prior year and improved 120 basis points sequentially compared with Q4 as we focus on improving our value perception and investing in transaction-driving initiatives,” CFO Ravi Thanawala shared during the first-quarter earnings call.
Image source: Papa Johns
Papa John's is closing restaurants
Papa John's opened 112 new restaurants while closing 31 in the United States.
Thanawala shared that international closures were handled a little differently.
“From an international perspective, we opened 198 new restaurants in 2024, while closing 155 restaurants, including 73 strategic closures in the UK, bringing our international restaurant count to 2,516. We continue to make significant progress across our international transformation as our teams work together with franchisees and local markets to build focused development plans and improve unit economics,” he shared during the Q4 earnings call.
Closures will continue in 2025.
“For restaurant closures, we continue to anticipate our closures will return to our historical average of approximately 1.5% to 2% of the North America system,” the CFO shared during the Q1 call.
The chain currently has 3,516 location in North American. That means it plans to close between 53 and 70 North American restaurants this year.
“Turning to restaurant development. We ended the first quarter of 2025 with 6,019 restaurants globally. In North America, we opened 18 new restaurants and closed 16, bringing our total North America restaurant count to 3,516. We still expect to open between 85 and 115 gross new restaurants in North America in 2025 and approximately 70% of remaining projected openings are currently in the construction design or later stages,” he added.
The chain will also be net positive, albeit just barely, between closures and openings in the rest of the world.
“From an international perspective, we opened 29 new restaurants in the first quarter, while closing 42, bringing our international restaurant count to 2,503,” he added.
Papa John's by the numbers
- North American same-store sales down 2.7% YoY
- Up to 70 U.S. stores expected to close in 2025
- Opened 18 new U.S. restaurants, closed 16 in Q1
- 3,516 total locations in North America
Papa John's is coming after Domino's and Pizza Hut
Papa John's CEO Todd Penegor understands that his brand is the challenger essentially facing dual champions around the world. He seems to embrace that role for the company.
“On the quality front, it's really having that challenger fighter brand mindset and really evolving some of our media mix away from linear and to more social and digital and really having a voice that's unique to Papa John's to point out our unique quality differences. There's a huge opportunity to connect to the next generation of consumer,” he said during the Q1 earnings call.
He believes the company has two simple messages that will resonate with consumers.
“Things like six simple ingredients on our original dough and the real cheese from mozzarella and pizza sauce from buying to sauce in 24 hours, those things matter, and they matter a lot. And it's a huge opportunity to make sure that people know that,” he shared.
Penegor also believes that Papa John's can market itself as a value brand.
“That's only can come from Papa John's. And we can do it at a very affordable price point because pizza is a very good value for the money category. And as things get a little tougher, I think the consumer truly realizes that, on what they can do to feed a family of three or four at a very affordable price,” he added.
