MTY Food Group is closing up to 50 Papa Murphy’s locations after the pizza chain kept losing money and losing momentum.
Quick Take
- MTY said 45 to 50 of the 68 planned closures are Papa Murphy’s stores.
- The targeted restaurants lost more than $10 million over the past year.
- MTY had already turned some franchise stores into company-owned units before this move.
- The company said the closures are meant to stop the bleeding and focus on stronger stores.
What MTY Decided
MTY Food Group said it will close 68 underperforming corporate-owned restaurants over the next six to nine months, and 45 to 50 of them are expected to be Papa Murphy’s locations.
The company said those stores had collectively lost more than $10 million in the past 12 months, which made the closure plan a financial decision as much as an operational one.
The first wave of closures was set to begin the week of July 13, according to reporting on the company’s earnings call. MTY said the moves should reduce near-term store count but help the chain cut losses and redirect resources to locations with better return potential.
Why Papa Murphy’s Is Under Pressure
CEO Eric Lefebvre said Papa Murphy’s was “struggling more than our other brands as of recent,” and he tied that weakness to a difficult pizza market.
He also said MTY had repossessed three clusters of stores that it believed it could improve, but the turnaround did not yield the results the company wanted.
Papa Murphy’s to close 50 restaurants over declining sales https://t.co/VxO3U513jo
— KFOR (@kfor) July 14, 2026
That matters because Papa Murphy’s was not just left alone to drift. MTY had bought the chain in a turnaround deal and later shifted some locations from franchise ownership to company control, hoping tighter management would improve results. The latest closures show how quickly that plan ran into the wall of weak sales and thin unit economics.
What the Numbers Show
The clearest sign of trouble is the loss figure. MTY said the 68 stores selected for closure lost more than $10 million over the past year, and that their performance had continued to worsen. The company also reported softer overall same-store sales, with declines in both the United States and Canada.
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
That kind of slide is hard to disguise in the restaurant business. A chain can hide a bad quarter. It cannot hide a pattern of stores that lose money month after month while still eating up rent, labor, and management time. MTY’s answer was blunt: shut the weakest locations, take the near-term pain, and hope the rest of the brand can breathe again.
Why This Story Hits a Bigger Nerve
Papa Murphy’s is not an isolated case. The closure plan fits a broader pattern in the restaurant world, where turnarounds often fail when buyers try to force a new operating model onto a brand that no longer fits its market.
Franchise systems can be nimble because local owners live with the numbers every day. Corporate ownership can bring greater control, but it can also lead to more overhead and less flexibility.
For MTY, the message is plain. The company tried to stabilize Papa Murphy’s by taking tighter control of the stores. Instead, it ended up admitting that dozens of those locations were still draining cash.
That is why the announcement landed so sharply: it was not framed as expansion, reinvention, or a fresh brand push. It was a retreat from a bet that did not pay off.
Sources:
foxbusiness.com, investing.com, youtube.com, scanx.trade
