Papa John’s signs a big development deal in Texas
The pizza chain, eager to add more locations after years of decline, has an agreement with Sun Holdings to develop 100 locations by 2029.
Papa John’s on Wednesday announced the largest domestic franchise deal in the company’s history, a 100-unit development agreement with the Dallas-based operator Sun Holdings that will expand the chain’s presence across Texas over the next eight years.
Sun Holdings is one of the largest franchisees in the U.S., with more than 1,000 locations in several brands, including Burger King, Popeyes, Krispy Kreme and Arby’s. According to the deal with Papa John’s, Sun will open the locations by 2029.
“Papa John’s development flywheel has started to take off,” Amanda Clark, Papa John’s chief development officer, said in a statement. “With industry leading paybacks and our key strategy of making it easy for franchisees to say yes to developing, we can attract great new partners to our brand.”
The deal is a major victory for Papa John’s, highlighting the brand’s remarkable turnaround over the past two years.
The company was stagnant for several years despite operating the fewest number of locations of the four big pizza chains, and declined by 200 units since 2017 amid sales challenges. But the company’s sales began improving in 2019 and then took off during the pandemic.
In the meantime, Papa John’s began changing its growth strategy, hiring Clark away from Taco Bell to lead its development efforts. The company has started focusing on larger development deals in a bid to spur its growth. The chain currently operates about 3,100 U.S. locations.
The efforts have been paying off. The company had record net unit growth in the first half of the year.
Sun Holdings is exactly the type of operator Papa John’s is targeting. The company was founded by Guillermo Perales and has operations in 12 states. “Since its founding, Sun Holdings has taken a long-term, disciplined approach when making growth investments,” Perales said in a statement.
He cited the company’s premium brand, culture and unit economics. “We know Texas well and see an immense opportunity to grow Papa John’s across this dynamic region,” Perales said.