Papa Johns’ 2024 has been tougher than most.
It began the year with a “Back to Better 2.0” strategy focusing on increased marketing investment, restaurant-level margin improvement, accelerated unit development, and optimization of international business models. Then in April, Papa Johns introduced its “Better Get You Some” brand platform, which celebrates the deep-seated passion for pizza among consumers by highlighting the emotional connections and cravings associated with pizza moments.
Despite the new direction, North America same-store sales dropped 2 percent in Q1, 4 percent in Q2, and 6 percent in Q3.
Not only that, but the brand went through an executive transition after former CEO Rob Lynch left for Shake Shack. Previous Wendy’s chief executive Todd Penegor took the reins in August. Joining him was new chief digital and technology officer Kevin Vasconi and new CMO Jenna Bromberg.
At Papa Johns’ Investor Day, the company laid out an updated vision for what it wanted to be in 2025 and beyond.
At the heart of Penegor’s strategy is a return to the fundamentals of “Better Ingredients, Better Pizza,” a promise the brand was built upon but has struggled to consistently deliver, he said. The CEO acknowledged that operational complexity and a proliferation of menu innovations have distracted from the company’s core pizza product.
“We’ve added a lot of complexity over the last many years,” Penegor said. “We’ve brought a lot of product on. It’s driven short-term sales and brought in new users, but it’s not driving the frequency we need, which a core pizza can do day in and day out.”
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The numbers tell part of the story. In 2019, medium and large original crust pizzas accounted for 75 percent of the company’s crust sales. By 2024, that figure had fallen to just over 50 percent, a shift attributed to the introduction of new crusts and toppings that, while innovative, created “rhythm breakers” in the kitchens. Penegor stressed the importance of simplifying operations to improve consistency and efficiency.
“New offerings actually bring in customers, but great pizza drives frequency and we got to get back to driving great pizza with every visit to drive that frequency and the connection to our brand,” the CEO said.
In addition to reducing menu complexity, another operational opportunity is oven calibration and bake times. Penegor said variability in baking processes across restaurants has impacted the consistency of pizzas. He added that slowing bake times will not only improve crust quality but also improve the preparation of sides like chicken wings. The executive also pointed to better training and support for general managers, so Papa Johns can rely on them as a foundation for operational excellence.
While simplification is a cornerstone of the strategy, Penegor clarified that innovation will not be abandoned. However, future product development will prioritize insights from a newly created Center of Excellence. This will ensure innovation is consumer-led, insight-driven, and occasion-based.
“We’ll find that right balance because pizza continues to remain our core offering,” Penegor said. “We will stay focused on how we go out and simplify our menu offerings to get some of those rhythm breakers out. And the work is clear—it has to be a balance between the core and the innovation.”
Amplifying Papa Johns’ marketing efforts is also a key strategic pillar. Penegor said the brand must adopt a challenger mentality, punch above its weight class, and show up differently to stand out among the competition. The chain showcased early wins from campaigns emphasizing quality and value, such as the Shaq-a-Roni and Papa Pairings promotions. These efforts have resonated with consumers and contributed to record-breaking sales events, including a highly successful Halloween.
Leading the charge is Bromberg, who brings previous experience as Pizza Hut’s director of core brand marketing and Carter’s VP of brand marketing and creative. She will be charged with using nontraditional channels to boost Papa Johns’ message, find innovative ways to tell the chain’s story, and connect with younger audiences.
Bromberg should have plenty of data at her fingertips to put these plans into action. Papa Johns is leveraging its data-rich environment—85 percent of orders come through digital channels—to create more personalized and seamless customer experiences. Early pilots of personalized customer relationship management (CRM) strategies have already shown promise, with targeted offers driving increased loyalty and frequency, according to Penegor.
“We have clean and very high integrity data that has just been underutilized,” Penegor said. “Let’s go out there and utilize and amplify this data like crazy. And we brought some partners in that we’ve worked together with in the past to bring this to life in a big way.”
The revamped loyalty program Papadough Rewards has allowed customers to earn rewards more quickly and lifted frequency among members. Engagement jumped from two in 10 customers using the program to five in 10.
Investments in technology will also focus on simplifying the ordering process. A recent app refresh increased conversions by 50 percent, and further upgrades, including quicker repeat-order functionality, are planned for early 2025.
Penegor noted that none of these goals would be possible without franchisee collaboration. The chain partners with 411 U.S. operators who own an average of 7.5 restaurants. Efforts to optimize unit economics include reducing build costs—currently averaging $500,000 per unit—and enhancing profitability through operational efficiencies. U.S. restaurants earned $1.2 million in AUV in 2023, up from $905,500 in 2019.
Papa Johns finished Q3 with 3,454 North America restaurants after opening 18 and closing 11 in the quarter.
“If you look at where our footprint stands relative to our couple of largest competitors, there is a significant amount of opportunity for us to continue to build this brand out, differentiate on quality, make sure folks understand the value for the money with a good price point and a high-quality experience and make sure that we bring it to life in big in different ways,” Penegor said. “So this is the opportunity ahead. Clearly a big opportunity in the U.S. both in infill and whitespace.”
Internationally, Papa Johns hopes to re-establish a sustainable operating model in the U.K. and accelerate growth in China; drive long-term expansion in well-established markets like Korea and Spain; continue penetration and build market share in places such as Chile, Peru, and the United Arab Emirates; and strategically enter trade areas, including India and Saudi Arabia. Papa Johns had 2,454 international restaurants as of September 29.
