Most people eat out or order takeout because it’s convenient. Not having to cook is one of the main draws behind spending the money to either eat in a restaurant or bring food home.
That makes the Papa Murphy’s model a challenging one to sell to consumers. The chain offers, what it calls “Take ‘N’ Bake pizza.
It shares how that works on its website.
“We make it fresh. You bake it to perfection. Delicious pizza you can take home and make your own. Prepared from scratch with fresh ingredients so you can take it, bake it, and enjoy it fresh out of the oven,” it shared.
Related: Pioneering pizza chain has closed 80% of its restaurants
So, essentially, Papa Murphy’s sells takeout pizza you still have to cook.
That’s a model that has been surprisingly successful, but it has struggled over the past few years. The chain’s owner, MTY Food Group, has closed hundreds of locations over the past two years with plans to shut down more.
Papa Murphy’s has closed a lot of stores
MTY Food Groups CEO Eric Lefebvre made it clear that while Papa Murphy’s has closed over 100 locations, it’s shutting down stores on a strategic basis.
“As part of our ongoing efforts to strengthen the brand and position it for long-term success, we’ve made the difficult but strategic decisions in partnership with our franchisees to close a certain number of underperforming locations over the last year. This allows us to focus our time, resources and support on markets and stores where we are seeing strongest growth and guest engagement,” he shared during the company’s third-quarter earnings call.
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The CEO made it clear that many of these closures were based on the commitment level of the franchisee and its willingness to spend money.
“What we’re seeing also at the moment is we have some franchisees that are pulling out a little bit of their local marketing efforts,” he said.
That has an immediate negative impact.
Pizza is very marketing driven. So as soon as you close the tap, you see the sales going down right away.
Papa Murphy’s CEO Eric Lefebvre
In cases where franchisees don’t want to invest, Papa Murphy’s has been working with them to exit markets. Lefebvre does believe that the worst is in the past for the chain.
“Will there be more store closures in the future? Probably a few. But I think you’re not going to see closures of the magnitude we’ve seen in the last 2 years,” he added.
Key Papa Murphy’s closure facts:
- 2023 Closures: Papa Murphy’s closed a net of 43 locations in 2023, a trend that continued into 2024.
- 2024 Closures: In the third quarter of 2024 alone, the company lost about 100 locations, primarily from franchise store closures.
- Franchise Challenges: Some closures occurred because the company lacked the infrastructure to keep locations open while finding a buyer for struggling franchisees.
- Market Factors: Factors contributing to the closures include price sensitivity, increased competition, and challenges in maintaining profitability.
Source: grocerants.blogspot.com
The pizza industry has struggled
Papa Murphy’s is not the only pizza chain that’s struggling. Essentially all of the major brands have shut down location, in many cases a lot of them, since 2023.
“In 2024, the pizza segment struggled significantly, with Technomic’s Top 500 Restaurants data showing 61% of pizza chains experienced declining sales,” Nation’s Restaurant News reported.
Pizza chains are also vulnerable to all of the issues that impact any restaurant.
“Many restaurant chains shut down locations during 2024. The whys are varied, but inflation almost certainly led the way, with wages, ingredient costs and other expenses increasing while cost-conscious consumers dined out or spent less,” FranchiseWire shared.
Pizza chain closures since 2023
(This is not a complete list, just the highlights).
- Papa Murphy’s: Closed 43 locations in 2023 and 100 in 2024, primarily franchise-owned stores.
- Oath Pizza: Closed all company-owned locations by December 2023.
- MOD Pizza: Closed 27 locations in 2024, including five in California.
- Bertucci’s: Closed several locations in 2023 and 2024, including its last New Jersey location in July 2023 and its last Connecticut spot in August 2025.
- Domino’s Closed 205 stores globally in early 2025, with the majority in Japan. Announced plans to close an additional 200 stores in 2025, primarily in underperforming international markets.
- Pizza Hut. Closed 15 locations in Northwest Indiana and several in Central Ohio in June 2024 due to a legal dispute with franchisee EYM Group. Warned that an additional 120 locations were at risk of closure due to the same dispute.
Papa Murphy’s FAQ:
- Franchise Model: Papa Murphy’s operates as a take-and-bake pizza franchise, eliminating in-store ovens and delivery services to reduce operational costs.
- Average Annual Revenue: Franchise locations average approximately $616,000 in annual revenue.
Investment Requirements:
- Franchise Fee: $15,000–$25,000
- Total Initial Investment: $367,428–$733,124
- Minimum Liquid Capital: $125,000
- Minimum Net Worth: $350,000
Financial Performance:
- Average Net Sales: $636,605 per store
- Highest Net Sales: $1,538,697
- Lowest Net Sales: $188,911
- Stores Exceeding Average Net Sales: 42.9%
Sources: papamurphysfranchise.com, Franchise Chatter
Related: Iconic convenience store chain closed 500 locations, more to come
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