Pizza Chain Bloodbath: 50 Stores Axed

Hands holding an out of business sign — PIZZA CHAIN BLOODBATH

A once-booming take-and-bake pizza chain is now shutting up to 50 more stores after a costly, failed turnaround experiment.

Story Snapshot

MTY Food Group will close 68 underperforming corporate-owned restaurants, up to 50 of them Papa Murphy’s.
These locations lost over $10 million in just 12 months, forcing a hard reset.
Most of the closing Papa Murphy’s stores were former franchises MTY converted to corporate control.
The move caps years of sales declines and nearly 150 Papa Murphy’s closures nationwide.

Pizza chain pushed into major cutbacks after mounting losses

Restaurant owner MTY Food Group is closing 68 underperforming corporate-owned restaurants over the next six to nine months, and up to 50 of those locations are expected to be Papa Murphy’s take-and-bake pizza shops.

These restaurants collectively lost more than $10 million in the past year, and their performance continued to worsen. Chief Executive Officer Eric Lefebvre told investors this step will shrink the store base now but should protect the business in the long run.

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

— KFOR (@kfor) July 14, 2026

Most of the Papa Murphy’s locations on the chopping block are not random weak links. MTY previously converted 45 to 50 of these stores from franchisee ownership to direct corporate control as part of a turnaround push. That strategy did not pay off.

The chain’s corporate segment profit fell sharply from about $11.3 million to $5.7 million, while corporate revenue dropped 15 percent to roughly $111.7 million. Lefebvre said Papa Murphy’s has been “struggling more than our other brands as of recent.”

A turnaround bet that backfired on the new owner

MTY bought Papa Murphy’s about two years ago for around 190 million dollars, aiming to fix a brand that had already seen years of sales decline. Since early 2023, Papa Murphy’s has closed roughly 120 stores, mostly franchise units, plus dozens more in 2022.

The latest plan to close up to 50 more Papa Murphy’s corporate locations shows the turnaround has not worked so far. Instead of boosting results, the franchise-to-corporate conversion created a group of stores that burned cash at scale.

MTY now faces between $ 10 million and $ 12 million in upfront costs to terminate leases and close these restaurants. That is real money out the door, on top of the 10 million in operating losses over the last year.

Management argues this hit is necessary to stop the ongoing bleed and free capital for healthier stores. From this view, that logic holds: if a unit cannot pay its bills and drags down the whole company, you close it and protect the jobs and locations that still work.

Take-and-bake model meets a harsher restaurant economy

Papa Murphy’s built its brand on a simple pitch. You buy an uncooked pizza, take it home, and bake it yourself. That model depends on busy families, low prices, and strong traffic in strip malls.

Same-store sales for MTY fell 2.1 percent overall, with declines in both the United States and Canada, indicating a tougher market for this kind of concept. Research on restaurant failures finds that franchise chains fail at rates very similar to independent operators, near 57 percent over time.

One of the largest pizza chains in the country is preparing to close up to 50 Papa Murphy’s locations as its parent company, MTY Food Group, eliminates underperforming restaurants while it works through a “challenging period” for the business. https://t.co/gxZrOff70F

— KIRO Newsradio 97.3 FM🎙 (@KIRONewsradio) July 13, 2026

Industry analysts say many restaurant chains are being squeezed at once by high food and labor costs, heavy debt, and softer customer traffic since 2025. That makes slow, low-margin concepts like take-and-bake pizza more exposed to risk.

When an outside owner steps in and tries to “fix” a struggling chain by taking over franchise stores, it often loses the local hustle and cost discipline that kept those locations afloat.

MTY’s experience with Papa Murphy’s fits this wider pattern of acquirer-led turnarounds failing due to operational misalignment and weak unit economics.

What this means for customers, workers, and investors

For customers, the impact is simple and personal. Many towns will lose their local Papa Murphy’s, joining a long list of communities where the brand has quietly vanished over the last few years.

For workers at the 68 corporate-owned restaurants, closure means job loss or forced relocation. For franchisees who remain, the message is mixed.

On one hand, cutting weak corporate units could strengthen the brand. On the other, it signals that the parent company is still searching for a winning play.

Investors reacted to MTY’s broader second quarter miss, not just Papa Murphy’s, with the stock slipping after earnings came in below forecasts. Yet the Papa Murphy’s situation is a clear warning sign. You cannot simply buy a struggling chain, centralize control, and expect a quick fix.

Without a sharp value proposition, lean operations, and respect for local know-how, even a large operator like MTY ends up closing stores and incurring significant losses. That is the hard, expensive lesson behind this pizza chain’s latest round of cuts.