Papa John's is set to open 50 new stores in different states.
The expansion is led by a former delivery driver who has become a key franchise owner. The new stores will be spread from Pennsylvania to Arizona.
Papa Johns Plans Major Expansion Effort
Papa Johns will grow significantly in key areas thanks to a new deal with one of its biggest franchise partners.
The pizza company plans to open 50 new restaurants by 2028. This expansion will happen with franchisee Nadeem Bajwa and his company, The Bajco Group. Over the past twenty years, The Bajco Group has become one of the largest Papa Johns franchisees in the country.
Papa Johns is set to increase its store count mainly in the Midwest and Florida, with plans to expand to Pennsylvania and Arizona.
The expansion is led by the Bajco Group, which currently runs 200 Papa Johns restaurants and aims to manage 500 locations in the future. Bajwa started his career over 30 years ago as a delivery driver for Papa Johns. Over the years, he has climbed the ranks by managing and eventually owning multiple restaurants.
Joe Sieve, Papa Johns' chief restaurant officer, praised Nadeem's progress. "Nadeem's story is a powerful testament to Papa Johns' commitment to helping its franchisees thrive. Starting as a delivery driver, he now represents the best of what Papa Johns offers to its team members and franchisees," Sieve said.
Bajwa recently emphasized the importance of leadership development. "You have a responsibility to shape what employees gain from their work," he said. "It's crucial to cultivate future leaders and to be surrounded by people eager to progress. If I slow down, it affects their ambitions as well."
This expansion deal with Bajco Group is part of Papa Johns' Back to Growth program, which falls under the larger Back to Better 2.0 strategy.
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Announced in January by the then-CEO Rob Lynch, the plan aims to explore new market opportunities and boost sales in North America by reducing the marketing costs for franchisees from 8% to 6%.
During the company's last earnings call, Lynch mentioned that the effects of the Back to Better 2.0 strategy should become apparent in the second quarter of 2024, which runs until the end of June.
The franchise development agreement with Bajco Group marks one of the first significant achievements of this incentive strategy.
Papa Johns Outpaces Smaller Pizza Chains
Papa Johns, with 3,145 locations in the U.S., remains behind giants like Domino's and Pizza Hut, which boast 6,902 and 6,805 stores, respectively. However, it is gaining ground on smaller competitors facing tougher challenges.
Recently, Mod Pizza, which provides a dine-in option unlike Papa Johns, closed 27 of its 500 locations. Other take-out-focused chains are also struggling; 1000 Degrees closed two of its 16 stores quickly last year.
Additionally, Papa Murphy's, known for its take-and-bake pizza, shut down 72 locations last year.
Eric Lefebvre, CEO of MTY Food Group, which owns Papa Murphy's, expressed concerns during a talk with analysts. "We closed a lot of stores in 2022, unfortunately. The performance is not where we want it to be," he said, indicating broader issues within the industry beyond just pizza chains.
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