In addition to providing a funnel of new guests, Lynch said third-party drivers supplement Papa John’s slimmer labor pool during its busiest times.
The help of those extra drivers prevented stores from closing early in the third quarter, and kept restaurants from turning off ordering mechanisms. Lynch previously explained drivers are Papa John’s No. 1 bottleneck and adding a significant number of drivers through models like DoorDash helps the chain manage labor and throughput.
“Obviously that allows us to deliver greater sales when we're not shutting things down,” Lynch said.
Similar to many in the industry, staffing shortages proved to be a challenge for the pizza chain. During the quarter, Papa John’s hosted a National Hiring Week in which the company and franchisees held more than 800 recruiting events in more than 60 markets. The chain hoped to add more than 20,000 new employees for full-time and part-time roles, including pizza makers, delivery drivers, shift leaders, managers, and more.
Lynch said Papa John’s is understaffed relative to last year, but added employees have “picked up the slack” and that general managers are “working harder than they ever have.” He emphasized workers are inspired to do so because of the improved working conditions the company implemented in the past couple of years.
“The foodservice business is always struggling and working to find people to come in and that's not a new dynamic,” he said. “Obviously, this is exacerbated at this point, but our people have just really taken it to heart and have done a great job managing through it.”
Despite headwinds with labor and supply chain, Papa John’s has continued to open restaurants at a brisk pace. The chain opened 46 net new locations in Q3, including 32 internationally and 14 in North America. Year-to-date, the brand has added 169 net new units. It expects to finish the year with 220 to 260 net new stores, which would represent year-over-year growth of 4.5 to 5 percent.
Future expansion is backed by large agreements. Papa John’s struck a deal with PJ Western Group to open 250 restaurants in Germany, and inked an agreement with Drake Food Service International to open more than 220 units in Latin America, Spain, Portugal, and the U.K. Then in September, Sun Holdings agreed to debut 100 stores across Texas through 2029, the largest domestic deal in Papa John’s history.
The brand finished the third quarter with 5,569 outlets systemwide, including 3,323 in North America and 2,246 internationally.
“We are very bullish in our ability to continue to deliver these large development agreements,” Lynch said. “I think we've consistently said that we have evolved our development strategy, both domestically and globally, away from opening up any store that anyone is willing to build to a much more strategic approach around bringing in new franchisees that are well-capitalized, have operational experience.”
“Sun Holdings is the first one and frankly, it's a great one,” he added. “But we are currently in discussions with both new and current franchisees on big development agreements, and we'll continue to announce those as they come to pass.”
Total company revenues increased 8.4 percent to $512.8 million in Q3, and global systemwide restaurant sales lifted 11.2 percent to $1.2 billion, fueled by innovation strategies and accelerating unit growth.