Papa Johns to serve up profit after closing over 40 sites
The UK boss of pizza giant Papa Johns has revealed the company is eyeing a return to profit in 2025 after closing more than 40 restaurants last year.
Managing director Chris Phylactou confirmed the business is “no longer losing money” and is on track to report its first UK profit since 2021.
Speaking on an up-coming episode of Morning Wire‘s Boardroom Uncovered podcast, Phylactou opened up about the impact closing so many stores had on the business, and himself.
Morning Wire reported in October 2024 that the UK arm of Papa Johns lost almost £20m in the year before it decided to close more than 40 underperforming restaurants.
The Milton Keynes-headquartered division posted a pre-tax loss of £19.9m for 2023, having also lost £4.1m in 2022.
Accounts with Companies House also showed its turnover nudged up from £95.1m to £95.9m in the 12 months.
The last time Papa Johns made a pre-tax profit in the UK was the £8.1m it achieved in 2021. At the time, its turnover stood at £102.3m.
Closing restaurants ‘the last thing we ever want to do’
Speaking on the upcoming episode of Boardroom Uncovered, Phylactou said: “In 2023 two of our largest partners flagged the risk of going insolvent.
“We took a strategic decision to acquire those and we kept those restaurants for nearly a year.
“We tried to look at which ones we could turn around and fortunately 60 of them were really good.
“We franchised them internally to incumbent franchisees, 13 of them we’ve kept under corporate ownership, but unfortunately 43 of them we’ve had to close. Closing restaurants is never an easy decision.
“It’s the last thing we ever want to do. It’s a lot of jobs, particularly when people’s livelihoods are at stake.
“But if restaurants perform performing badly and losing a lot of money, sometimes the best decision is to close them.”
Papa Johns UK is ‘no longer losing money’
The UK boss of Papa Johns also revealed that the division is “no longer losing money” and that it’s now expecting to make a profit in 2025.
“That’s because of the difficult decisions we made back then”, Phylactou said.
“Having people lose their jobs is the last option for us. We tried everything to keep the restaurants open.”
He added: “It’s never an easy decision and something that I wasn’t happy doing, but it’s something that we had to do as a brand.
“We held on to the restaurants probably longer than we should have to protect the people for as long as we could.
“And we put a lot of effort into trying those trying to turn those businesses around.
“But unfortunately, they were even the wrong location and the performance of the restaurants was really bad.
“So there was no business case to keep them open.”
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