In its latest annual report, the UK arm of the Indiana-founded pizza chain revealed a pre-tax loss of £21.8 million.
Citing reduced revenue and difficult economic conditions, Papa Johns GB has closed 74 of its restaurants.
For the year ending 29 December 2024, the pizza chain reported a pre-tax loss of £21.8 million, up from £19.3 million the previous year, alongside a decline in turnover from £95.9 million to £88.7 million.
In a strategic move to refocus on profitability, the company shut approximately one-seventh of its UK portfolio, with only seven new openings during the same period.
Staff costs dropped to £7.4m in 2024 from £8.1m the year before, with average monthly employee numbers falling from 176 to 167.
At the end of the period, the UK portfolio comprised 457 Papa John’s restaurants, with 444 run by franchisees and 13 operated by PJ Corp Stores Limited.
The directors said: “As we navigate this challenging economic environment, we are continuing to invest in capabilities to improve our operations and will continue the work to further re-position the franchise base to further strengthen our business in the UK.
“Increases in labour, mileage, insurance, fuel and other costs adversely affect the profitability of our franchise restaurants and QCC. Many of the factors affecting costs in our system-wide restaurant operations are beyond our control, and we may not be able to adequately mitigate these costs or pass along these costs to our customers or franchisees, given the significant competitive pricing pressures we face.”
The directors indicated plans to support certain franchisees through royalty relief or loans, while acknowledging that further closures of unprofitable restaurants may still occur.
The business faced heightened competition from third-party aggregators in the delivery sector, as these platforms continue to compete for skilled drivers.
Papa Johns was established in Jeffersonville, Indiana, in 1984 by “Papa” John Schnatter. The brand made its UK debut in 1999 with the opening of a restaurant in Grays, Sussex.