Where the fundamentals no longer support that path, we made the decision to close stores.
In the summer of 2026, Papa Murphy's parent company MTY Group announced the closure of up to 50 take-and-bake pizza locations — a quiet but telling moment in the longer story of how consumer habits, rising costs, and market saturation are reshaping the American dining landscape. The decision, framed by executives as deliberate rather than desperate, reflects a broader reckoning across the pizza industry, where Pizza Hut and Papa Johns are also retreating from hundreds of locations. What looks like a corporate balance sheet adjustment is also, at its edges, a human story: workers displaced, neighborhoods losing a familiar storefront, and a 1979-born chain continuing its slow contraction into a smaller version of itself.
- Papa Murphy's has shed over 150 locations in just two years, and the latest round of closures will eliminate most of what remains of its corporate-owned base.
- The 50 shuttered stores were collectively losing more than CAD 10 million a year — a bleeding that MTY Group's leadership decided could no longer be tolerated.
- Closure and lease termination costs of CAD 10–12 million will squeeze cash flow in the short term, even as executives insist the long-term math favors cutting losses now.
- Pizza Hut and Papa Johns are closing hundreds of their own stores simultaneously, signaling that this is not one chain's failure but an industry-wide contraction under pressure from costs and shifting appetites.
- Workers at the affected locations face job loss, while the company's reassurance of a 'measured approach' offers warmth in language but little in concrete detail.
- MTY Group has left the door open to further closures if underperformance continues — meaning this restructuring may be a chapter, not a conclusion.
Papa Murphy's is closing up to 50 restaurants, with the first shutdowns beginning the week of July 13, 2026. The announcement came during MTY Group's second-quarter earnings call, when CEO Eric Lefebvre disclosed plans to close 68 underperforming corporate-owned locations across the company's broader portfolio over the next six to nine months. Each location was evaluated individually, and those selected for closure were collectively losing more than CAD 10 million annually.
Lefebvre was careful to characterize the move as measured rather than panicked — a deliberate divestment from stores where the underlying economics no longer held, rather than a fire sale. Where recovery seemed plausible, the company said it would keep investing. Where it did not, closure was the answer. The restructuring will carry a short-term price tag of CAD 10–12 million in closure and lease termination costs, but executives believe eliminating chronic losses will improve long-term profitability.
The numbers tell a story of sustained retreat. Papa Murphy's operated 1,168 restaurants in 2023. By the end of 2025, that figure had fallen to 1,014. The chain ended last year with just 49 company-owned locations, meaning the current closures will wipe out the majority of its corporate-operated presence. Many of the affected stores were originally franchise locations that MTY Group had repossessed and attempted to rehabilitate — an investment the company ultimately concluded was not worth continuing.
Papa Murphy's is not contracting alone. Pizza Hut closed roughly 250 locations in the first half of 2026. Papa Johns has announced plans to shutter up to 300 stores by the end of 2027. Rising operating costs, changing consumer spending, and intensifying competition are pressing the entire industry to shrink its footprint. MTY Group's own quarterly results reflected the strain: revenue fell 8.2 percent year over year, same-store sales dropped 2.1 percent, and franchise revenue declined 4 percent.
MTY Group operates more than 80 brands across over 7,000 locations in North America and beyond, with roughly 97 percent of those under franchise or operator agreements. The corporate-owned stores that remain are expected to earn their keep. Those that cannot will be closed — and Lefebvre acknowledged that further closures remain possible if other locations continue to struggle. For the employees at the affected restaurants, the restructuring means job loss. The company has promised a measured approach to minimize disruption, though it has offered few specifics about what support, if any, displaced workers will receive.
Papa Murphy's is closing up to 50 restaurants. The announcement came during MTY Group's second-quarter earnings call in mid-2026, when CEO Eric Lefebvre disclosed plans to shutter 68 underperforming corporate-owned locations across the company's portfolio over the next six to nine months. The first closures are scheduled to begin the week of July 13. For Papa Murphy's specifically—the take-and-bake pizza chain founded in 1979—the move represents a continuation of years of contraction in an industry under sustained pressure.
The restaurants selected for closure were chosen after individual evaluation of their financial prospects and local market conditions. Collectively, these locations generated losses exceeding CAD 10 million annually. Lefebvre framed the decision as deliberate rather than desperate: the company was not conducting a fire sale, he said, but rather making a measured choice to divest from stores where the fundamentals no longer supported continued operation. Where improvement seemed possible, MTY Group would continue investing. Where it did not, closure made sense.
The financial toll of the restructuring will be substantial in the near term. MTY Group estimates closure and lease termination costs between CAD 10 million and CAD 12 million. These expenses will temporarily reduce free cash flow. However, executives believe the long-term payoff justifies the short-term pain: by eliminating chronic losses and concentrating resources on stronger performers, the company expects to improve overall profitability. The affected restaurants were performing well below system averages, so their departure should not meaningfully damage same-store sales figures.
Papa Murphy's decline has been steep and sustained. The chain operated 1,168 restaurants in 2023. By 2025, that number had fallen to 1,014—a loss of 154 locations in two years. Most of those closures involved franchise locations. The company ended 2025 with just 49 company-owned restaurants, meaning the current round of closures will eliminate the majority of its corporate-operated base. Two years earlier, MTY Group had repossessed three groups of Papa Murphy's franchises, believing they could be rehabilitated. After investing in those locations, the company concluded that many of the markets were no longer viable and chose to close them instead.
The broader pizza industry is contracting simultaneously. Pizza Hut closed approximately 250 restaurants during the first half of 2026 alone. Papa Johns announced plans to close up to 300 locations through the end of 2027. The pressures are industry-wide: rising operating costs, shifting consumer spending patterns, and intensifying competition have forced even established chains to reconsider their footprints. MTY Group's second-quarter results reflected these headwinds. Revenue declined 8.2 percent year over year. Same-store sales fell 2.1 percent. System sales decreased 3.5 percent. Franchise segment revenue dropped 4 percent.
MTY Group itself is a sprawling operation—one of North America's largest restaurant franchisors, operating more than 80 brands including Wetzel's Pretzels and Cold Stone Creamery across Canada, the United States, and international markets. Approximately 97 percent of its 7,040 locations are franchised or managed under operator agreements, meaning the company carries less direct exposure to individual store performance than it once did. Still, the corporate-owned restaurants that remain are expected to generate returns. Those that do not will be closed.
Leftebvre indicated that additional closures remain possible if other locations continue to underperform. The company is taking what it describes as a measured approach to minimize disruption for employees, landlords, and suppliers—a nod to the human cost of the restructuring, though the statement offers little detail about severance, relocation assistance, or other support. For workers at the affected locations, the closures represent job loss. For the company, they represent a necessary pruning of a portfolio that has grown too large and too unprofitable to sustain.
Citações Notáveis
We've been slowly but gradually disposing of some stores where it makes sense for us. It's not fire sale, but we're also in the process where we can reduce the corporate store portfolio.— Eric Lefebvre, CEO of MTY Group
Where we saw a path to improve, we chose to continue investing efforts into making our existing assets as productive as they can be. Where the fundamentals no longer support that path, we made the decision to close stores.— Eric Lefebvre, CEO of MTY Group
A Conversa do Hearth Outra perspectiva sobre a história
Why is Papa Murphy's struggling when pizza itself seems like a stable category?
Pizza is stable as a category, but Papa Murphy's operates in a specific niche—take-and-bake, where customers buy unbaked pizzas and finish them at home. That model depends on price sensitivity and convenience. When operating costs rise and consumers tighten spending, that value proposition gets squeezed from both sides.
The company lost over CAD 10 million across these 50 stores. That's roughly CAD 200,000 per location per year. How does a restaurant get that deep underwater?
Some of it is fixed costs—rent, labor, utilities—that don't scale down when sales decline. Some is market saturation or demographic shift in a neighborhood. Some is just that the location was never ideal to begin with. Once a store starts losing money, it's hard to reverse without major reinvestment, and MTY Group decided reinvestment wasn't worth it in these cases.
The company says it's taking a measured approach to minimize disruption. What does that actually mean for the people working there?
The statement is vague, which is telling. It likely means staggered closures rather than all at once, and probably some notice period. But measured from a corporate perspective doesn't necessarily mean generous from a worker's perspective. These are still job losses.
Papa Murphy's went from 1,168 stores to 1,014 in two years. At that rate, how long does the chain have?
The rate of decline has been steep, but this restructuring is meant to stabilize what remains. By cutting the worst performers, the company is trying to create a smaller but healthier base. Whether that works depends on whether the remaining stores can actually turn profitable and whether consumer demand for take-and-bake pizza rebounds.
Pizza Hut and Papa Johns are also closing hundreds of stores. Is this a death spiral for pizza chains, or just industry adjustment?
It's adjustment, but painful adjustment. Pizza is a mature category. Growth has to come from market share, not category expansion. When costs rise and consumers spend less, chains have to shrink to match demand. The chains that survive will be leaner and more selective about locations.