Papa Johns closes 74 UK restaurants in a bid to return to profitability

Papa Johns GB has closed 74 restaurants amid reduced turnover and “challenging” economic conditions.

In its results for the year ended 29 December 2024, the pizza chain saw pre-tax losses widen from £19.3m the previous year to £21.8m, while turnover dropped from £95.9m to £88.7m.

It made the decision to close roughly a seventh of its UK-wide estate amid a renewed focus on profitability, only opening seven new restaurants during that time.

Staff costs also fell from £8.1m in 2023 to £7.4m in 2024, with the monthly average number of employees during the year declining from 176 to 167.

By the end of this period, its portfolio consisted of 457 Papa John’s restaurants in the UK, 444 of which were operated by franchisees, and 13 by PJ Corp Stores Limited.

The directors said: “As we navigate this challenging economic environment, we are continuing to invest in capabilities to improve our operations and will continue the work to further re-position the franchise base to further strengthen our business in the UK.

“Increases in labour, mileage, insurance, fuel and other costs adversely affect the profitability of our franchise restaurants and QCC. Many of the factors affecting costs in our system-wide restaurant operations are beyond our control, and we may not be able to adequately mitigate these costs or pass along these costs to our customers or franchisees, given the significant competitive pricing pressures we face.”

The directors said the would support some franchisees in the form of royalty relief or loans. Further closures of unprofitable restaurants remains a possibility.

The business also said it faced increasing competition from third-party brands in the delivery space, who are on the hunt for qualified drivers.

Papa Johns was founded in Jeffersonville, Indiana, in 1984 by “Papa” John Schnatter. In 1999, the pizza chain landed in the UK for the first time, opening a restaurant in Grays in Essex.

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