Papa John's is closing around 300 restaurants across North America over the next two years, the Atlanta-based pizza chain announced.

The closures will affect roughly 21% of the chain's global sales and target locations that have failed to meet performance benchmarks. Papa John's chief financial officer, Ravi Thanawala, said the company identified the struggling stores during the company's earnings call.

"We have identified approximately 300 underperforming restaurants across North America that are not meeting brand expectations or lack a clear path to sustainable financial improvement, as well as locations where we can effectively transfer sales to a nearby restaurant," Thanawala said.

The targeted locations are primarily franchise-owned, more than a decade old, and generate less than $600,000 in annual sales. Most of the closures — around 200 — are expected to happen this year, with the remaining roughly 100 shutting down in 2027.

Thanawala said the closures are "strategic," and that the company believes they "will further strengthen the system, increasing average unit volumes by at least 3% and improve franchisee health by allowing franchisees to reallocate resources towards operational excellence in their remaining restaurants."

Papa John's is also cutting items from its menu — including its popular Papadia sandwich line and Papa Bites — and reducing its corporate workforce by about 7% as part of broader cost-cutting moves. The chain cited rising food costs and labor inflation over the past two years as key factors driving the changes.

Papa John's CEO Todd Penegor said that same-store sales dropped 5.4% in the fourth quarter, which he attributed to "a weak consumer backdrop and elevated promotional environment."

Papa John's operated 3,523 restaurants in North America as of the fourth quarter of 2025, and opened 96 new locations during its latest fiscal year. Exact locations slated for closure have not yet been announced.

Papa John's is not alone in scaling back. Rival pizza chain Pizza Hut recently announced it will close around 250 U.S. locations through June as part of a broader effort to modernize its operations. Ranjith Roy, chief financial officer of Pizza Hut's corporate parent Yum! Brands, said those closures will also target weaker-performing restaurants.

The company has not yet disclosed which specific North American locations will be affected by the closures.