Popular pizza chain sells 85 locations in surprising business move

DPZ +0.25%

Although pizza originated in Italy, the U.S. has arguably made it its own, popularizing iconic regional styles such as Chicago deep-dish, New York thin-crust, and Detroit square pan pizza. Over time, pizza has become such a defining American staple that the world's largest pizza chains are now predominantly U.S.-based.

As of 2025, the top domestic pizza chains by total number of locations include Hunt Brothers Pizza, Domino's Pizza (DPZ), Yum! Brands' Pizza Hut (YUM), Papa Johns, and Marco's Pizza, according to ScrapeHero.

Papa Johns has been a major player in the industry for over four decades, but amid intensifying competition, even legacy brands face struggles. In the third quarter of 2025, North America comparable sales fell 3% year over year, continuing a nearly uninterrupted downward trend in its U.S. market.

This decline led the company to make a significant shift in its restaurant portfolio, which could reshape its entire business for years to come.

Papa Johns sells locations nationwide

Papa Johns (PZZA) has sold 85 restaurants in Washington, D.C., and Baltimore, Maryland, to Pie Investments Management, led by Chris Patel, making the group one of the pizza chain's largest U.S. franchisees.

With this acquisition, Pie Investments now operates more than 150 Papa Johns restaurants nationwide. The group plans to open 52 additional units in the Philadelphia market over the next five years, aiming to reach 250 locations by 2030.

The restaurants were previously owned by Colonel's Limited, LLC, a joint venture between Papa Johns and Steeplechase Express, Inc. The group, led by the company's longest-standing franchisee, William Freitas, who is now retiring, opened its first Papa Johns restaurant in 1993 and became an early adopter of digital channels, helping position the brand as one of the first major pizza chains to offer online ordering.

"Chris has built a team of leaders passionate about pizza, and his impressive record in acquiring restaurants and improving their profitability is well known across the Papa Johns system," said Papa Johns CFO and President of North America Ravi Thanawala in a press release.

Papa Johns' refranchising strategy to boost growth

This latest sale is part of a broader refranchising initiative. During the third-quarter earnings call for fiscal 2025, Papa Johns stated plans to reduce company-owned restaurants in North America to a mid-single-digit percentage of its nearly 6,000 global locations.

Over the next two years, Papa Johns intends to accelerate its domestic refranchising efforts to drive profitable growth and expand into high-demand markets to improve the long-term economic model of its restaurants.

"We are navigating a challenging consumer and competitive environment and executing a strategy to ensure Papa Johns delivers sustainable, profitable growth," said CEO Todd Penegor in the earnings call. "While the full benefits will take some time, our transformation strategy is showing positive results, and we are taking far-reaching actions to accelerate the progress we are making."

However, franchising comes with risks.

"Labor experts say that franchised chains have higher rates of violations than corporate-run chains because theyare less invested in preserving a brand’s reputation," wrote Lauren Kaori Gurley and Emmanuel Martinez for The Washington Post. "They are also under pressure to keep labor costs low to make up for steep operating costs, especially franchise fees."

More restaurant news:

• 37-year-old Italian restaurant chain quietly closes most locations

• McDonald’s announces unexpected closure, sparking major backlash

• Iconic frozen yogurt chain makes comeback after closing 2,650 stores

As of September 28, 2025, Papa Johns operates 5,994 restaurants across 51 countries and territories. Of its 3,517 North America units, 2,976 are franchise-owned.

Still, the company's restructuring has resulted in the closure of 28 franchised locations in North America within the same time period.

"Growth in the pizza restaurant space increasingly hinges on how well brands balance consistency with innovation," said Restoworks. "It's no longer enough to dominate with footprint or price; winning operators are those who align formats with local markets, experiment with diverse flavors to match emerging tastes, and invest in technology."

Papa Johns restructuring efforts

Last year, Papa Johns said it was acting with "urgency" to improve operations after several quarters of declining performance, highlighting five key elements to accelerate profitable growth.

Papa Johns Five-Step Plan:

• Focus on core products

• Amplify marketing

• Invest in technology

• Differentiate the customer experience

• Partner with and evolving the franchise base

"We are looking actively at what's the right level of company ownership, what's the role of refranchising and how does that help stimulate even more growth for our system as we scale up franchisees that are growth minded and bring some new folks into the system to make sure we got some new growth minded franchisees that want to be part of the Papa Johns journey in the future," Penegor said in the company's third-quarter 2024 earnings call.

Despite these efforts, Papa Johns' stock has fallen more than 16.5% over the past year.

Meanwhile, rumors have circulated since 2024 that Papa Johns could be acquired by private equity firms, including Apollo Global Management (as reported by Reuters), TriArtisan Capital, and Irth Capital Management. While no official agreements have been reached, a sale would take the company private for the first time since 1993.

"Bearish analysts are concerned that the ongoing buyout rumors have shifted attention away from core business fundamentals and performance metrics," said Simply Wall Street analysts. "Uncertainty regarding the realization of a formal bid and potential shifts in deal terms could introduce share price volatility and downside risk."

Related: 100-year-old grocery chain's stores acquired by rival after closures

This story was originally published by TheStreet on Dec 2, 2025, where it first appeared in the Restaurants section. Add TheStreet as a Preferred Source by clicking here.