Papa Murphy Pizza Store Closures to Reduce Corporate Portfolio Over Next Nine Months

MTY Group, the Canadian franchisor that acquired Papa Murphy's two years ago, announced the closure of 45 to 50 corporate-owned locations within the next six to nine months as part of a broader effort to improve profitability. The decision stems from a detailed review of underperforming corporate stores, with selected Papa Murphy's locations having collectively lost more than $10 million over the past 12 months. Closures are set to begin this week, with the company prioritising staff transitions and landlord negotiations throughout the wind-down process.

Strategic Portfolio Restructuring

Eric Lefebvre, Chief Executive Officer of MTY Group, framed the closures as a deliberate step to strengthen the company's long-term position. The franchisor operates multiple restaurant concepts globally, including Wetzel's Pretzels, Cold Stone Creamery, and Pinkberry, but identified Papa Murphy's as facing particular challenges in the United States market. Lefebvre noted that while the action reduces store count in the near term, it allows the company to redirect resources toward higher-performing locations and brands with stronger profit potential.

The Papa Murphy's brand has experienced significant contraction in recent years. Store count declined from 1,168 locations in 2023 to 1,014 by 2025, though the majority of these closures involved franchised units rather than corporate-owned stores. The take-and-bake pizza concept, which allows customers to purchase uncooked, customisable pizzas and prepare them at home, has struggled to maintain competitive performance in current market conditions.

Broader Company Context

MTY Group's decision reflects wider economic pressures affecting the foodservice sector. The company reported that second quarter results were impacted by continued strain on consumer spending and a challenging operating environment. However, the franchisor maintained that its asset-light and diversified business model continued to generate strong free cash flow from operations. The company also announced an ongoing strategic review process initiated in November 2025, with advisors evaluating potential alternatives to enhance shareholder value, though no timeline or assurances regarding any transaction have been provided.

Beyond Papa Murphy's, MTY Group indicated that other underperforming brands within its portfolio may face additional closures, though none are expected to reach the magnitude of the Papa Murphy's restructuring. The company characterised its approach as measured and deliberate rather than a wholesale liquidation of assets, with executives emphasising disciplined execution and focus on sustainable operations.