Although pizza originated in Italy, the United States arguably made it its own, popularizing iconic regional styles such as Chicago deep dish pizza, New York thin crust pizza, and Detroit square pan pizza. Over time, pizza has become an American staple so much so that the world’s largest pizza chains are now primarily based in the United States.
In 2025, the leading national pizza chains by total locations include Hunt Brothers Pizza, Domino’s Pizza (DPZ), Yum! Brands’ Pizza Hut (YUM), Papa Johns and Marco’s Pizza, according to ScrapeHero.
Papa Johns has been a major player in the industry for more than four decades, but amid intensifying competition, even traditional brands are facing challenges. In the third quarter of 2025, comparable sales in North America fell 3% year-over-year, continuing a nearly uninterrupted downward trend in its U.S. market.
This decline has led the company to make a significant shift in its restaurant portfolio, which could reshape its entire business for years to come.
Papa Johns (PZZA) sold 85 restaurants in Washington, D.C. and Baltimore, Maryland, to Pie Investments Management, led by Chris Patel, making the group one of the pizza chain’s largest U.S. franchisees.
With this acquisition, Pie Investments now operates more than 150 Papa Johns restaurants nationwide. The group plans to open an additional 52 units in the Philadelphia market over the next five years, with a goal of reaching 250 locations by 2030.
The restaurants were previously owned by Colonel’s Limited, LLC, a joint venture between Papa Johns and Steeplechase Express, Inc. The group, led by the company’s longest-tenured franchisee, William Freitas, now retired, opened its first Papa Johns restaurant in 1993 and became an early adopter of digital channels, helping position the brand as one of the first major pizza chains to offer online ordering.
“Chris has built a team of executives who are passionate about pizza, and his impressive track record of acquiring restaurants and improving their profitability is well known throughout the Papa Johns system,” Papa Johns CFO and President of North America Ravi Thanawala said in a press release.
Papa Johns Refranchises 85 Restaurants to Drive Profitable Growth.Shutterstock” loading=”eager” height=”540″ width=”960″ class=”yf-1gfnohs loader”/>
Papa Johns Refranchises 85 Restaurants to Drive Profitable Growth.Shutterstock
This latest sale is part of a broader refranchising initiative. During the third-quarter fiscal 2025 earnings call, Papa Johns announced plans to reduce company-owned restaurants in North America to a mid-single-digit percentage of its nearly 6,000 locations worldwide.
Over the next two years, Papa Johns intends to accelerate its national refranchising efforts to generate profitable growth and expand into high-demand markets to improve the long-term business model of its restaurants.
“We are navigating a challenging consumer and competitive environment and executing a strategy to ensure Papa Johns generates sustainable, profitable growth,” CEO Todd Penegor said during the earnings conference call. “While the full benefits will take time, our transformation strategy is yielding positive results and we are taking far-reaching steps to accelerate the progress we are making.”
However, franchising comes with risks.
“Business experts say franchised chains have higher violation rates than corporate-run chains because they are less invested in preserving a brand’s reputation,” Lauren Kaori Gurley and Emmanuel Martinez wrote for the Washington Post. “They are also under pressure to keep labor costs low to offset high operating costs, including franchise fees.”
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As of September 28, 2025, Papa Johns operated 5,994 restaurants in 51 countries and territories. Of its 3,517 units in North America, 2,976 are franchised.
Yet corporate restructuring resulted in the closure of 28 franchise locations in North America during the same period.
“Growth in the pizza industry increasingly depends on how brands balance consistency and innovation,” Restoworks said. “It is no longer enough to dominate by footprint or price; winning operators are those that align formats with local markets, experiment with various flavors to match emerging tastes, and invest in technology. »
Last year, Papa Johns said it was acting “urgently” to improve its operations after several quarters of declining performance, highlighting five key elements to accelerate profitable growth.
“We are actively exploring what is the right level of business ownership, what is the role of refranchising and how does that help drive even more growth in our system as we increase growth-minded franchisees and introduce new people into the system to ensure that we have new growth-minded franchisees who want to be part of the Papa Johns journey going forward,” Penegor said on the third-quarter earnings call 2024 of the company.
Despite these efforts, Papa Johns shares have fallen more than 16.5% over the past year.
Meanwhile, rumors have been circulating since 2024 that Papa Johns could be acquired by private equity firms, including Apollo Global Management (as reported by Reuters), TriArtisan Capital and Irth Capital Management. Although no official deal has been reached, a sale would take the company private for the first time since 1993.
“Pessimistic analysts worry that ongoing buyout rumors have distracted from core business fundamentals and performance metrics,” Simply Wall Street analysts said. “Uncertainty regarding the completion of a formal offer and potential changes in the terms of the agreement could introduce stock price volatility and downside risk.”
Related: Stores of century-old grocery chain acquired by rival after closures
This story was originally published by TheStreet on December 2, 2025, where it first appeared in the Restaurants section. Add TheStreet as your preferred source by clicking here.
