Papa Murphy’s to Shut Down Up to 50 Corporate-Owned Restaurants Amid Ongoing Restructuring

MTY Group, the parent company of Papa Murphy’s, has announced plans to close up to 50 corporate-owned restaurants over the next six to nine months as part of a strategic restructuring initiative. The closures, which will primarily impact Papa Murphy’s locations, represent a targeted effort to eliminate underperforming outlets and strengthen the company’s overall financial performance. The first wave of shutdowns is scheduled to begin during the week of July 13.

The decision follows a challenging period for the pizza chain, as the industry grapples with rising operational costs, evolving consumer preferences, and increased competition. During the second quarter of fiscal 2026, MTY Group reported an 8.2% decline in revenue and a 2.1% drop in same-store sales.

CEO Eric Lefebvre emphasized that each location was evaluated based on its long-term financial viability and local market conditions. The targeted restaurants collectively generated over CAD 10 million in losses, while the company determined that other locations offered better prospects for recovery and growth.

This restructuring marks the continuation of a multi-year downsizing trend for Papa Murphy’s. The chain’s total restaurant count has fallen from 1,168 locations in 2023 to 1,014 by 2025, with most reductions occurring at franchise-operated venues. The company ended 2025 with only 49 corporate-owned restaurants, meaning the current closures will impact the majority of its directly operated locations.

The company anticipates incurring closure and lease termination costs between CAD 10 million and CAD 12 million. While these expenses will temporarily affect free cash flow, executives expect the restructuring to enhance profitability and allow resources to be redirected toward higher-performing locations.

Papa Murphy’s joins other major pizza chains in reevaluating their physical footprints. Pizza Hut closed approximately 250 restaurants in the first half of 2026, while Papa Johns plans to shutter up to 300 locations by the end of 2027. These industry-wide adjustments reflect growing pressure on traditional restaurant models amid changing market dynamics.

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