Papa Murphy’s, a popular take-and-bake pizza chain, is facing more closures as parent company MTY Food Group announced plans to shutter 68 underperforming corporately owned restaurants over the next nine months. Of those closures, between 45 and 50 will be Papa Murphy’s locations.
The decision to close these stores comes after MTY attempted to revive a collection of stores it took back from Papa Murphy’s franchisees two years ago. Despite efforts to turn these locations around, MTY CEO Eric Lefebvre stated that some markets are no longer suitable for Papa Murphy’s and the company has chosen to close a significant number of stores in these areas.
The closures are expected to primarily occur in the third quarter, with the first closures beginning this week. This represents about 1 percent of MTY’s systemwide restaurant base. The move follows a comprehensive review of the company-operated portfolio, with locations collectively losing over $10 million in the past 12 months.
The closures will cost between $10 million and $12 million in lease termination and related expenses. However, MTY believes that this strategic decision will improve future profitability by eliminating stores that no longer justify additional investment. The restaurants slated for closure were experiencing average sales declines of 8 to 9 percent, significantly worse than the broader system.
Despite the closures, MTY remains optimistic about franchise development for the remainder of 2026. The company opened six net restaurants in the second quarter and anticipates development to accelerate in the second half of the year, particularly with brands like Cold Stone Creamery and Wetzel’s Pretzels. Excluding the planned corporate closures, management expects positive net unit growth for the year.
Overall, MTY is focused on driving strong cash generation, supporting its franchise network, advancing its new store pipeline, and taking action to improve the quality and profitability of the business. While the U.S. pizza market is competitive and challenging, MTY remains committed to navigating the industry landscape and delivering value to its customers and stakeholders.
The original article was published on QSR Magazine and can be found here.
