Papa Murphy’s Closing 50 Stores: MTY Food Group’s Restructuring Plan Explained

The take-and-bake pizza chain Papa Murphy's is shrinking its corporate footprint. MTY Food Group, the Canadian franchisor that acquired the brand two years ago, announced during its Q2 2026 earnings call that 45 to 50 underperforming corporate locations will close over the next six to nine months. The first wave of shutters began the week of July 13, 2026.

Why MTY Is Closing Papa Murphy's Stores

CEO Eric Lefebvre framed the closures as a deliberate restructuring, not a panic move. The targeted stores, combined with other lagging brands in MTY's portfolio, lost over $10 million in the past 12 months. "The decision will reduce our store count in the near term, but we believe it is the right long-term action for the business," Lefebvre said. "It will allow us to reduce losses, improve the quality of the corporate store portfolio, and focus our resources on locations and brands with stronger return potential."

MTY's portfolio stretches well beyond pizza. The group also operates Wetzel's Pretzels and Cold Stone Creamery, among other quick-service brands. The Papa Murphy's closures are part of a broader performance review across that portfolio. Lefebvre described the approach as gradual: "We've been slowly but gradually disposing of some stores where it makes sense for us. It's not a fire sale, but we're also in a process where we can reduce the corporate store portfolio." Future closures remain possible as MTY continues to evaluate which locations justify continued investment.

The Financial Logic Behind the Cuts

The financial logic is straightforward. A corporate store that consistently loses money drags on consolidated earnings and consumes management attention. By cutting those units, MTY can redirect capital and operational focus toward franchise locations and corporate stores with healthier unit economics. The $10 million loss figure cited by Lefebvre covers multiple brands, but Papa Murphy's represents a significant portion of the closures, signaling that the take-and-bake model faces particular headwinds inside MTY's mix.

Papa Murphy's occupies an unusual niche in the pizza market. Customers buy an assembled, uncooked pizza in-store and bake it at home. The model eliminates delivery infrastructure and in-store dining costs, but it also removes the immediate gratification that defines most fast-casual pizza competitors. When consumer habits shift toward delivery apps and hot-food convenience, a take-and-bake value proposition can struggle to maintain foot traffic. MTY's earnings call did not break out specific consumer trend data, but the decision to close up to 50 locations after only two years of ownership suggests that the brand's corporate-store economics did not meet post-acquisition expectations.

What This Means for Franchisees and the Brand

The closures also reflect a common pattern in franchise-heavy restaurant groups. When a franchisor acquires a brand, it often inherits a mix of corporate and franchise locations. Corporate stores that were marginal under previous ownership can become an immediate drag on the new parent's income statement. MTY's move to prune those locations early in its ownership cycle is consistent with a playbook that prioritizes portfolio profitability over raw store count. Lefebvre's language—"reduce losses, improve the quality of the corporate store portfolio"—is a direct articulation of that strategy.

For franchisees, the corporate closures carry mixed signals. A smaller corporate footprint can mean less direct competition for nearby franchise units, but it can also signal that the brand's company-operated economics are under pressure. Franchisees will watch whether MTY reinvests the freed-up resources into marketing, supply chain improvements, or menu innovation that benefits the entire system. The gradual, non-fire-sale approach Lefebvre described suggests MTY wants to manage landlord negotiations and distribution logistics carefully, minimizing disruption to remaining operations.

The Broader Fast-Casual Pizza Landscape

The broader fast-casual pizza segment has seen its own churn. Regional chains and independent pizzerias have faced rising food and labor costs, while large delivery platforms have reshaped how customers order pizza. Papa Murphy's take-and-bake model sidesteps delivery costs but still competes for the same dinner-dollar. Without specific market-share data in the earnings call, the closures stand as a tangible signal that MTY sees better returns elsewhere in its portfolio.

MTY's disclosure that the targeted stores lost over $10 million in a year puts a hard number on the urgency. Restaurant-level losses of that scale, even spread across multiple brands, create a clear incentive to act. The six-to-nine-month closure timeline gives MTY room to manage exits without triggering the kind of abrupt shutdowns that can damage a brand's reputation with landlords and franchisees. Lefebvre's insistence that "it's not a fire sale" reinforces that the group is optimizing, not retreating.

What Customers Should Know

For customers, the immediate effect depends on geography. The closures affect corporate locations, not franchise stores, so the impact will be concentrated in markets where MTY directly operates Papa Murphy's units. The company has not published a list of affected addresses, but the first wave of closures began immediately after the July 13 announcement. Customers who rely on a specific store should check its operating status directly.

The Papa Murphy's restructuring fits a broader pattern of restaurant portfolio management in a post-pandemic, inflation-adjusted economy. Chains that grew through acquisition are now sorting which units earn their place on the income statement. MTY's move is a financial triage, not a brand shutdown. The take-and-bake concept will continue through franchise locations and the corporate stores that survived the performance review. Whether the remaining base can generate the returns MTY expects will depend on how the group uses the resources freed by these closures.