Papa Johns sells 85 restaurants in major refranchising deal

Papa Johns is following through on its promise of putting restaurants in the hands of capable franchisees.

The pizza giant announced that Pie Investments’ Chris Patel has taken over 85 restaurants in the Washington, D.C. and Baltimore markets, making him one of the chain’s largest U.S. operators at more than 150 stores. As part of the agreement, Pie Investments will also open another 52 restaurants by 2030 across those same trade areas and Philadelphia.

“Papa Johns well-known commitment to quality continues to make the brand an attractive investment for entrepreneurs,” Patel said in a statement. “Papa Johns leadership is empowering franchisees to drive success, with tools to elevate our operations and enhance our customer experience. We’re looking forward to continued growth with Papa Johns and bringing the brand promise of Better Ingredients. Better Pizza. to new groups of pizza lovers.”

The units were previously owned through a joint venture between Papa Johns and franchisee William Freitas of Colonel’s Limited, who is retiring. Freitas opened his first Papa Johns unit in 1993 and became one of the first operators to embrace digital channels.

Papa Johns signaled that this move was coming during its Q3 earnings call earlier in November. The brand’s goal is to decrease its corporate restaurant ownership to a mid-single-digit percentage of the North America system. At the end of Q3, there were 545 company-owned locations and 2,962 franchise outlets.

The company’s refranchising strategy dates back to last year. In Q3 2024, CEO Todd Penegor told analysts, “We are looking actively at what’s the right level of company ownership, what’s the role of refranchising, and how does that help stimulate even more growth for our system as we scale up franchisees that are growth minded and bring some new folks into the system to make sure we got some new growth minded franchisees that want to be part of the Papa Johns journey in the future.”

In a note published earlier in 2025, BTIG analyst Peter Saleh estimated that Papa Johns could raise several hundred million dollars by selling most of its corporate restaurants. He also cautioned that refranchising 300–400 stores would likely slow near-term new unit development as operators absorb the acquired restaurants and could depress per-store sale prices as more units hit the market, but noted that long-term benefits include lower G&A and maintenance CapEx, higher-margin royalty and commissary revenue, and funds for debt reduction or share repurchase.

The brand’s North America same-store sales dropped 3 percent in Q3 year-over-year. Total revenues of $508 million were flat compared to the prior year.

The transaction also comes as Papa Johns considers a possible sale. Penegor told investors the chain is “open-minded” and “would fully consider” the opportunity if a favorable deal presented itself.