MTY Food Group, parent of Papa Murphy’s, SweetFrog, and Pinkberry, said Monday that it temporarily closed 2,100 restaurants and laid off half of its workforce.
The Montreal, Canada-based company said most corporate units are closed, except those under Papa Murphy’s. At the end of Q4, MTY’s system included 7,373 locations—144 corporate and 7,229 franchises.
The brand’s executive team reduced their salary and capital expenditures have been reduced to a minimum. The parent also suspended its quarterly dividend. On March 16, the company brought financial relief to its franchisees by postponing the collection of royalties for four weeks, which was expected to be between $15 million and $18 million. Eight days later, MTY announced that it was closing its offices across Canada.
MTY Food Group hopes to file its Q1 financial results by May 15. The deadline is May 29. Without exemptions from Canadian authorities, the previous deadline would have been April 14.
"Ensuring a safe and healthy working environment for our workforce as well as helping our franchisees and business partners during these difficult times is a primary focus for MTY and we continue to implement and enforce additional precautionary health and safety measures,” CEO Eric Lefebvre said in a statement. "MTY is extremely thankful to all its business partners, financial institutions, landlords, and the authorities that are for the vast majority of them making significant sacrifices to help MTY and its franchise partners weather the storm and bounce back when the situation goes back to normal.”
MTY views the business disruption as temporary, but added that it is unknown how damaging the effects will be, not only on sales, but also on consumer behavior. The company expects its results to be materially affected at least through Q2 and Q3.
“The severity of the impact will depend on multiple factors, including the duration of the disruption and assistance from governments, financial institutions, landlords, and business partners available to MTY and its franchisees,” MTY said in a statement.