An American favorite pizza chain is quietly disappearing from communities across the country.
Papa Johns is following through on its plan to close about 300 North American stores, with dozens of locations shuttering in the first quarter – primarily in core Sun Belt states.
A recent analysis of Papa Johns financial filings by Fast Company found that 44 stores closed across 17 states, with the highest concentration of closures in Texas, California, Florida and Arizona.
Multiple location closures have also been identified in Michigan, North Carolina and Virginia.
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The pizza brand first announced in February that hundreds of underperforming restaurants would cease operations by the end of 2027, describing the locations as being primarily franchise-owned, more than a decade old and generating less than $600,000 in annual sales volumes (AUVs).
“We believe these closures will further strengthen the system, increasing AUVs by at least 3% and improve franchisee health by allowing franchisees to reallocate resources towards operational excellence in their remaining restaurants and open units in priority markets,” Papa Johns CFO Ravi Thanawala previously said.
He also said that the majority of the company’s restaurants worldwide have “performed well over the years and delivered strong returns for both corporate and franchise owners,” and that the strategic closure of underperforming restaurants is “among the most impactful actions we can take to improve restaurant profitability and fleet health.”
However, shares of Papa Johns International were down roughly 21% year to date through Wednesday’s close. Over the past five years, shares of Papa Johns International have fallen more than 69%.
In addition to the Q1 store closures, filings showed that Papa Johns laid off 7% of its corporate workforce.
Not only are franchisees across the fast-food industry facing severe headwinds from inflation, supply chain expenses and labor costs, but pizzerias nationwide are facing stiff competition. A recent Wall Street Journal report found that pizza restaurants are now outnumbered by Mexican restaurants and coffee shops.
Other pizza chain competitors have made strategic moves amid weakening demand, including rival Pizza Hut closing hundreds of locations and its parent company, Yum! Brands, reportedly looking into a potential sale of the chain.
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FOX Business’ Matthew Kazin contributed to this report.
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