The pizza giant is preparing to close a number of restaurants and as the parent company works to eliminate underperforming locations it follows what executives describe as a “challenging period” for the business.
The restructuring is part of a broader effort to improve operations at company-owned restaurants, with the first closures expected to begin during the week of July 13 and continue over the next several months.
The move comes as pizza chains across the industry face higher operating costs, changing consumer spending, and increased competition. In recent months, brands including Pizza Hut and Papa Johns have also announced significant store closures as they restructure their networks.
Now, another well-known pizza chain is joining the growing list of brands cutting restaurant footprints.
Papa Murphy’s confirms restaurant closure
During MTY Group’s 2026 second-quarter earnings call, CEO Eric Lefebvre said the company plans to close 68 underperforming company-owned restaurants in the next six to nine months.
Up to 50 of those locations are expected to be Papa Murphy’s restaurants, while the remaining closures will affect other MTY Group brands.
Here’s something else my previous entry of pizza chain closures:
Founded in 1979, MTY Group (MTY) is one of the largest restaurant franchisors in North America, operating more than 80 restaurant brands, including Papa Murphy’s, Wetzel’s Pretzels, Cold Stone Creamery, and others, across Canada, the US, and international markets.
Some restaurants are scheduled to close permanently during the week of July 13, although Lefebvre said the company is taking a limited approach to minimize disruption to employees, landlords and servers.
“We have been gradually abandoning other stores where we are heard,” said Lefebvre. “It is not a fire sale, but we are also working on plans where we can reduce the portfolio of corporate stores.”
He added that more restaurant closures are still possible if other locations continue to underperform.
Why is Papa Murphy’s closing stores
According to Lefebvre, the company evaluated each restaurant based on its long-term financial outlook and local market conditions. The locations selected for closure collectively incurred a loss of more than CAD 10 million.
“When we see a way to improve, we chose to continue investing so that our existing assets are as productive as possible,” said Lefebvre. “When the fundamentals no longer supported that approach, we made the decision to close the stores.”
While the closures will temporarily reduce the number of MTY Group restaurants, management believes the move will strengthen the business by reducing losses and allow the company to focus on areas with long-term growth potential.
The company estimates closing costs and lease termination between CAD 10 million and CAD 12 million. While those costs will balance free cash flow in the short term, MTY Group expects restructuring to improve profitability going forward.
Management also said the closings are unlikely to have a material impact on same-store sales because the affected restaurants were operating well below the system average.
Papa Murphy’s confirms plans to close up to 50 restaurants. Shutterstock
Papa Murphy’s has been on the decline for years
The latest closings continue an effort to downsize Papa Murphy’s, which has struggled to regain traction in an increasingly competitive pizza market.
About two years ago, MTY Group reacquired three Papa Murphy’s restaurant groups that were believed to be turnarounds. After investing in those areas, the company eventually concluded that many markets were no longer viable and decided to close stores instead.
As a result, the number of Papa Murphy’s stores will decrease from 1,168 restaurants in 2023 to 1,014 in 2025, according to the company’s franchise disclosure document. Most of those reductions involved franchise locations.
The chain ended in 2025 with 49 company-owned restaurants, meaning the latest restructuring will affect the majority of chain stores.
During the second fiscal quarter of 2026, MTY Group reported:
Revenue was down 8.2% year over year.
Same-store sales fell 2.1%.
System sales were down 3.5%.
Franchise segment revenue was down 4%.
The company operates 7,040 locations, approximately 97% of which are franchised or managed under user agreements.
Other pizza chains are also shrinking their footprints
Papa Murphy’s is far from the only pizza chain setting up a restaurant.
Pizza Hut: About 250 restaurants have closed in the first half of 2026, NRN reports.
Papa Johns: It plans to close up to 300 locations by the end of 2027, Fast Company reports.
The latest closures highlight how even established pizza chains continue to rethink their moves as operators balance rising costs with softer consumer demand.
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This story was originally published by TheStreet on Jul 11, 2026, where it first appeared on Restaurants part. Add TheStreet as a Preferred Source by clicking here.
