Papa Murphy’s to shutter up to 50 underperforming stores amid restructuring

One of the largest pizza chains in the country is preparing to close up to 50 Papa Murphy’s locations as its parent company, MTY Food Group, eliminates underperforming restaurants while it works through a “challenging period” for the business.

The closures are anticipated to begin this week and continue over the next several months as MTY works through a broader effort with hopes of improving the performance of its corporate-owned restaurants, according to The Street.

Papa Murphy’s move follows a similar trend among other industry giants, such as Papa John’s and Pizza Hut, who have also confirmed large store closures as a result of elevated operating costs, competition, and altered consumer spending habits.

Papa Murphy’s closures are part of a broader effort to trim underperforming stores

In the latest MTY earnings call, CEO Eric Lefebvre said that the company is planning to shutter 68 of its underperforming corporate-owned locations across the nation over the next six to nine months.

“We’ve been slowly but gradually disposing of some stores where it makes sense for us,” Lefebvre said, according to The Street. “It’s not a fire sale, but we’re also in the process where we can reduce the corporate store portfolio.”

Of the 68 locations, 50 are anticipated to be Papa Murphy’s restaurants, while the remaining 18 are set to impact other MTY Group brands.

In total, MTY Group operates more than 80 restaurant brands, such as Papa Murphy’s, Wetzel’s Pretzels, and Cold Stone Creamery, among several others, across various local and international markets.

Lefebvre also noted that the possibility for additional closures remains open if other restaurants continue to underperform.

Closures follow years of steady decline in Papa Murphy’s store count

Each restaurant has been individually evaluated based on its long-term financial forecast and local market conditions. All of the selected closure locations had collectively generated more than 10 million Canadian dollars (CAD) in losses.

“Where we saw a path to improve, we chose to continue investing efforts into making our existing assets as productive as they can be,” Lefebvre said, according to The Street. “Where the fundamentals no longer support that path, we made the decision to close stores.”

MTY is estimating the costs for closure and lease termination to range between 10 million and 12 million CAD.

Between 2023 and 2025, Papa Murphy’s total store count decreased by 154, most of which involved franchise locations, according to the company’s franchise disclosure document, obtained by The Street.

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