Strategic Restructuring: A New Era for Pizza Retail

Major Pizza Chain Initiates Widespread Store Closures

A leading pizza enterprise is preparing for the closure of dozens of its establishments. This move is part of a larger initiative by its parent organization to shed underperforming units, following what executives have described as a particularly 'arduous period' for the business. The process of corporate restructuring is designed to boost the financial health of its company-owned restaurants, with the initial wave of closures slated to commence around mid-July and extend over the subsequent months.

Industry-Wide Challenges Drive Downsizing Trend

This development unfolds as pizza chains across the sector contend with escalating operational expenses, shifts in consumer spending habits, and an intensely competitive environment. In recent times, major brands like Pizza Hut and Papa Johns have also announced substantial store reductions, as they work to optimize their networks. Now, another well-recognized pizza chain is joining the increasing roster of brands scaling back their physical footprint.

Papa Murphy's Confirms Reduction in Restaurant Count

During MTY Group's financial briefing for the second quarter of fiscal year 2026, CEO Eric Lefebvre announced plans to close 68 underperforming company-owned restaurants within the next six to nine months. It is anticipated that as many as 50 of these closures will be Papa Murphy's outlets, with the remaining affecting other brands under the MTY Group umbrella.

Rationale Behind Papa Murphy's Store Consolidations

According to Lefebvre, the company meticulously assessed each restaurant's long-term financial viability and local market conditions. The chosen locations for closure collectively incurred losses exceeding CAD 10 million. Lefebvre stated, "In instances where we identified a clear path to improvement, we committed to further investment in optimizing our existing assets. However, where fundamental conditions no longer supported growth, the decision was made to close those stores."

A History of Shrinking: Papa Murphy's Long-Term Trend

These latest closures mark a continuation of a multi-year trend of downsizing for Papa Murphy's, a chain that has struggled to regain momentum in an increasingly cutthroat pizza market. Approximately two years prior, MTY Group reacquired three clusters of Papa Murphy's restaurants with the intent of revitalizing them. After significant investment, the company ultimately determined that many of these markets were no longer sustainable, leading to the decision to close the stores instead. Consequently, Papa Murphy's total store count decreased from 1,168 in 2023 to 1,014 in 2025, primarily due to reductions in franchised locations. By the close of 2025, the chain operated only 49 company-owned restaurants, indicating that the current restructuring will impact the majority of its corporate-managed establishments. For the second quarter of fiscal 2026, MTY Group reported an 8.2% year-over-year decline in revenue, a 2.1% drop in same-store sales, and a 3.5% decrease in system sales. The franchise segment's revenue fell by 4%. The company maintained 7,040 locations, with approximately 97% operating under franchise or management agreements.

Other Pizza Giants Also Streamlining Operations

Papa Murphy's is not an isolated case in trimming its restaurant base. Pizza Hut closed about 250 restaurants in the first half of 2026, according to NRN. Similarly, Papa Johns intends to shut down up to 300 locations by the end of 2027, as reported by Fast Company. These recent closures underscore how even well-established pizza chains are reevaluating their physical presence, balancing increasing costs with softening consumer deman