Papa Murphy's to Shut Up to 50 Corporate Stores Amid Wider Pizza Chain Cutbacks
Papa Murphy's parent MTI Group announced on its fiscal 2026 second‑quarter earnings call that it will close 68 underperforming corporate‑owned restaurants over the next six to nine months, with as many as 50 of those sites belonging to the Papa Murphy's brand. The closures are slated to begin the week of July 13 and will be carried out gradually to limit disruption for staff, landlords and suppliers, CEO Eric Lefebvre said.
The decision follows a detailed review of each location’s long‑term financial outlook and local market conditions. The restaurants slated for shutdown collectively posted losses exceeding CAD 10 million, prompting MTI to deem them unsustainable. Lefebvre noted that while the company will continue to invest in sites with growth potential, “where the fundamentals no longer support that path, we made the decision to close stores.” The expected cost of shutting down and terminating leases ranges from CAD 10 million to CAD 12 million, a short‑term hit to free cash flow but one the firm believes will improve profitability.
Papa Murphy's has been trimming its footprint for several years. After a 2023 count of 1,168 locations, the chain fell to 1,014 stores by the end of 2025, most of the reductions occurring in franchise units. At the close of 2025, only 49 restaurants were company‑owned, meaning the upcoming closures will affect the bulk of its corporate portfolio.
The move mirrors a broader industry trend, with Pizza Hut having shuttered roughly 250 outlets in the first half of 2026 and Papa John’s planning up to 300 closures through 2027. Higher operating costs, shifting consumer spending and intense competition are driving these network rationalisations.
For investors, the restructuring signals MTI’s focus on shedding loss‑making assets to bolster margins, though the immediate cash‑flow impact and reduced store count could weigh on short‑term earnings. The longer‑term effect will depend on the company’s ability to strengthen remaining locations and capture market share in a constrained pizza market.
