5/23/2023 0 Comments Catapult infused coffee![]() N ew franchisees are excited about Papa John’s potential for a variety of reasons, one being the lack of opportunities in other national players. In recent years, Papa John’s has entered 12 new countries, like France, Spain, Tunisia, Iraq, the Netherlands, Morocco, Kazakhstan, Kyrgyzstan, Poland, Pakistan, and Portugal.īut Lynch said not to disregard growth happening in North America either. That includes more than 170 restaurants across Latin America, Spain, and Portugal, where the operator already runs more than 280 units. And then on Thursday, the company revealed a deal with its largest franchisee Drake Food Service International to open more than 220 stores by 2025. In late June, Papa John’s announced a partnership with franchisee PJ Western Group to open 250 restaurants in Germany in the next seven years. ![]() The brand is making moves to change that, though. About 80 percent of that will come from international markets, which is the ratio Papa John’s is shooting for on an ongoing basis. The chain operates in roughly 50 countries while its competitors have planted flags in more than 100. “We thought maybe it was a little bit of a lag from the pandemic, but that has continued and we're actually building momentum.”īecause of Q2’s performance and accelerating interest from new and existing franchisees, Papa John’s raised its global unit growth outlook to 220 to 260 net new units this year. “ We were a little bit surprised by how many units we opened in Q1,” he added. “With the improved unit volumes as well as our ability to identify better sites in real estate and help our franchisees set up restaurants, we're anticipating a lot less closures moving forward, which will allow us to sustain high unit growth on an ongoing basis.” “I think this brand had fallen a little bit into a behavior where we'd open a fair amount of restaurants, we'd also closed a lot of restaurants,” Lynch said during the brand’s Q2 earnings call. The company has opened a net of 176 units in the trailing four quarters. The pizza chain finished Q2 with 5,523 locations systemwide-3,309 in North America and 2,214 internationally. ![]() In the first two quarters of 2021, Papa John’s posted a record 123 net unit openings (68 in Q1 and 55 in Q2). The strength of that infrastructure is starting to manifest, however. READ MORE: Off Record Year, Papa John’s Pivots to Global Growth The goal was to ensure these units went into the right markets and had tools for success. Papa John’s not only wanted to increase the number of restaurants it was constructing, but the number of net new locations. Lynch explained that last year, the chain spoke mostly about building the proper infrastructure to support a “sustainable, significant amount” of unit expansion. franchisees are talking about growth today. With those type of unit-level economics, it’s easy to understand why almost all U.S. AUVs in North America continue to increase beyond the $1 million level, with much of the growth flowing through to unit profitability. Internationally, same-store sales skyrocketed 21.2 percent, or 27 percent on a two-year basis. North America comps lifted 5.2 percent in Q2, successfully lapping last year’s record year-over-year run of 28 percent. The current environment is quite different as Papa John’s heads into the second half of 2021. Two years ago, almost none of Papa John’s domestic franchisees were discussing development, CEO Rob Lynch said.Īnd why would they have? In Q2 2019, North America same-store sales decreased 5.7 percent and total revenue dropped 7.1 percent as the company continued to contend with a disrupted culture stirred by public spats with founder and former CEO John Schnatter.
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