Pizza Chain Freefall: 50 Shops Vanish

Person flipping closed sign on glass door — PIZZA CHAIN FREEFALL

A pizza chain once touted as a turnaround success is now closing up to 50 of its own stores after the rescue plan blew up on launch.

Story Snapshot

MTY Food Group will shut 68 loss-making corporate restaurants, including 45–50 Papa Murphy’s locations, over the next 6–9 months.
Those 68 stores lost more than $10 million in the past year, on top of a sharp drop in corporate profit and revenue.
The closures cap a failed attempt to “fix” Papa Murphy’s by converting struggling franchise stores into company-run units.
The take-and-bake pizza model now faces rising costs, softer traffic, and brutal competition from big delivery brands.

Turnaround plan that turned into a shutdown plan

MTY Food Group, the Canadian owner of more than 80 restaurant brands, told investors it will close 68 underperforming corporate-owned locations in the next six to nine months, with up to 50 of those being Papa Murphy’s pizza shops.

The company had taken back several clusters of weak Papa Murphy’s franchise locations, betting that direct corporate control could lift sales and profits. That bet failed. The targeted stores collectively lost more than $10 million over the past 12 months, and performance “for the most part” continued to worsen.

Papa Murphy’s to close 50 restaurants over declining sales https://t.co/VxO3U513jo

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Chief executive Eric Lefebvre said these Papa Murphy’s locations have been “struggling more than our other brands” in what he called a tough, crowded pizza market. MTY now expects to spend another $10 million to $12 million to shut the doors, mainly for lease exits and other closing costs.

In plain terms, management is paying a large lump sum today to stop the steady bleeding from a group of restaurants that never turned the corner after the takeover from franchisees.

Why MTY bought Papa Murphy’s in the first place

MTY bought Papa Murphy’s about two years ago for roughly $190 million, pitching the deal as a classic turnaround play: a well-known but tired brand that a bigger operator could revive with better systems and scale. Instead, corporate profit from Papa Murphy’s and related units dropped from $11.3 million to $5.7 million, while segment revenue fell about 15% to $111.7 million.

Same-store sales across MTY brands slid 2.1%, with declines on both sides of the border, signaling that the broader environment also turned against the company’s plans.

That matters for investors and for franchise owners. The logic of a turnaround is simple: buy low, fix fast, and enjoy the improved cash flow. What happened here looks closer to a value trap.

MTY stepped into a segment where food and labor costs climbed, pandemic-era debt came due, and traffic softened across quick-service chains. That mix squeezes “unit economics” — the profit of each store — and makes any weak concept far harder to repair once things start to slide.

The franchise-to-corporate trap exposed

The key misstep sits at the heart of many modern restaurant failures: converting franchise locations into company-owned stores and assuming head office can run them better.

Research on restaurant outcomes shows that franchise chains fail at almost the same rate as independent operators over time, with more than half closing within a few years.

Local owners often survive by trimming costs, hustling for traffic, and knowing their neighborhood. Corporate managers, far away, rarely match that focus.

MTY repossessed several clusters of Papa Murphy’s stores because it believed it could “put them on better footing.” Instead, 45–50 of those are now slated for closure. That is a warning to any large buyer who thinks scale alone replaces skin in the game.

Centralized control can help with marketing and supply deals, but it often adds layers of cost and dulls the urgency that comes with the owner locking up every night.

Papa Murphy’s in a shrinking, crowded pizza landscape

Papa Murphy’s has not just hit a rough patch; it has been shrinking for years. The brand shut roughly 43 locations in 2023 and about 100 in 2024, mostly franchise stores. Other coverage notes that since early 2023, the chain has closed around 120 units, on top of dozens that were shut in 2022.

This latest wave of corporate store closures pushes the total number of shuttered shops close to 150 in just a few years, a dramatic pullback for a chain once common in suburban strip malls.

MTY Food Group is closing 68 underperforming restaurant locations, citing declining sales and rising costs. Affected by a closure or layoffs?
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The take-and-bake model faces unique pressure. Many families now expect hot pizza delivered to their door in under 40 minutes from national brands that run huge ad budgets.

At the same time, grocery store prepared foods and low-cost frozen pizzas have improved, cutting into the “bake at home” niche.

Lefebvre has argued that these closures will allow MTY to focus resources on markets with higher returns and stronger customer engagement, and he has suggested that the worst of the downsizing may now be over.