Papa Johns, the fourth-largest pizza chain by U.S. sales, is making bold moves to reshape its business in 2026. The Louisville, Kentucky-based company announced plans to shutter hundreds of underperforming stores across North America, slash menu offerings, and reduce corporate jobs as part of a sweeping turnaround effort. The closures, primarily targeting franchise-owned locations, are expected to transform the company’s footprint and financial outlook over the next two years.
During a quarterly earnings call on February 26, 2026, Papa Johns executives detailed their strategy: approximately 300 restaurants will close by the end of 2027, with the bulk—about 200—shutting their doors in 2026. The decision comes amid a shifting landscape for pizza chains, with consumer preferences evolving and competition intensifying both at home and abroad.
“These actions ... represent meaningful progress against our transformational objectives, we have substantially improved our brand health as well as our value and quality perception with our customers, which will translate into market share gains,” CEO Todd Penegor stated during the call, according to USA Today. The company’s leadership believes that by streamlining operations and focusing on its most promising markets, Papa Johns will emerge stronger and more competitive.
The closures are not the company’s only cost-cutting measure. Papa Johns is also trimming its menu—removing less popular items to streamline kitchen operations and enhance efficiency. In addition, the company is reducing its corporate workforce, though precise numbers were not disclosed. According to Dow Jones & Company, these steps are central to the company’s broader turnaround plan, which aims to boost profitability and better align resources with consumer demand.
Behind the dramatic restructuring lies a mixed financial picture. In 2025, Papa Johns reported a modest 1% increase in global sales compared to the previous year. However, this growth was almost entirely driven by international markets, which saw a 5% uptick in sales. The North American market, by contrast, experienced a 2% dip. This divergence has prompted the company to rethink its strategy in its home market, where competition from rivals like Domino’s, Pizza Hut, and a growing number of local chains has intensified.
Chief Financial Officer Ravi Thanawala explained that the planned closures will mostly impact franchise-owned stores that have struggled to keep pace. “By the end of 2027, Papa Johns expects to close approximately 300 underperforming restaurants, mainly franchise-owned locations, across North America,” Thanawala said. “Two hundred closures are likely to occur in 2026.” The company expects these actions to yield significant cost savings—at least $25 million through 2027, with roughly $13 million anticipated in 2026 alone.
Despite the scale of the closures, Papa Johns is not retreating from the market entirely. In fact, the company plans to open between 40 and 50 new restaurants in North America during 2026, focusing on locations with strong potential for growth. This dual approach—closing underperforming stores while opening new ones—reflects what the company calls an effort to “optimize” its operations. The goal is to concentrate resources and investment in areas where the brand is strongest and customer loyalty is highest.
Innovation remains a key pillar of Papa Johns’ comeback plan. The company has recently piloted a protein crust pizza, combining culinary research and development with a nod to changing dietary trends. CEO Penegor emphasized that such products are designed to attract new customers while keeping loyal fans engaged. “The company intends to continue rolling out ‘exciting new products’ that combine culinary research and development with innovation,” Penegor said, as reported by USA Today. This focus on menu innovation is seen as critical to differentiating Papa Johns in a crowded marketplace.
While the company’s overall growth in 2025 was relatively flat, Penegor noted that Papa Johns saw increased utilization from its most loyal consumers. This core customer base, he argued, provides a foundation for future growth—especially as the company introduces new products and streamlines its operations. “We have substantially improved our brand health as well as our value and quality perception with our customers,” Penegor said. He expressed optimism that these improvements would translate into market share gains over time.
The store closures and job cuts underscore the challenges facing the U.S. pizza industry. Rising labor costs, shifting consumer habits, and the lingering effects of the COVID-19 pandemic have all taken a toll. For franchise owners, the closures represent a difficult but, according to the company, necessary step. Many of the affected locations have struggled with declining sales and profitability, making them unsustainable in the long run.
Papa Johns’ moves mirror broader trends in the fast-food and quick-service restaurant sector, where chains are increasingly focused on optimizing their portfolios and investing in digital ordering, delivery, and innovation. As delivery apps and third-party platforms reshape how Americans order pizza, chains like Papa Johns are under pressure to adapt quickly or risk falling behind.
Industry analysts point out that Papa Johns’ strategy is not without risks. Closing hundreds of stores could alienate some customers and franchisees, particularly in markets where the brand’s presence is already thin. However, the company’s willingness to make tough decisions—combined with investments in new products and targeted openings—could position it for renewed growth in the years ahead.
For now, the company is banking on a leaner, more focused operation to deliver results. The anticipated $25 million in cost savings through 2027 will be reinvested in marketing, technology, and product development, according to company officials. These investments, they hope, will help Papa Johns regain its competitive edge and win back market share lost to rivals.
As 2026 unfolds, all eyes in the restaurant industry will be on Papa Johns to see whether its turnaround plan delivers the desired results. The stakes are high—not just for the company and its franchisees, but for the broader fast-food landscape, where innovation and adaptability are more important than ever. Papa Johns’ story serves as a reminder that even the biggest brands must evolve to survive in a rapidly changing world.