Papa John’s UK eyes profit comeback in 2025
The pizza chain does not expect to recover this year from losses in 2023.
Papa John’s (GB) Limited expects to return to profit in 2025 as it tries to find the right recipe to kickstart growth, including tech investments that could mark the start of a financial turnaround.
The pizza restaurant chain is also investing in people and technology, including new customer relationship management systems and reinforcing its team in the UK, where the company has been reorganising its business, Chris Phylactou, managing director at Papa John’s UK, told QSR Media.
The company does not expect to recover from its £18.5m net loss in 2023 this year, even if company-owned stores in the UK are “in growth” and the business has been doing much better, he said in an interview.
“We’ve invested heavily in the transformation — we're going to be losing money probably again this year, but next year, we're going to be profitable,” Phylactou said.
Papa John’s UK has re-franchised 60 company-owned branches to “really strong franchise partners,” resulting in as much as 15% better performance, he said. “A big part of our future is partnering and getting closer with our franchise partners.”
Papa John’s has kept 13 of its company-owned stores in the UK to serve as a testing ground for new technologies and operating methods. “We’re using them as a test hub at this point, and the whole system is benefitting from them,” Phylactou said.
The US-based pizza restaurant chain closed 43 of its more than 400 stores in the UK this year after taking over 116 branches owned by two franchise partners who faced financial difficulty.
“So pretty much overnight, we went from being a franchise support business to being the franchise support business and the owner of the largest number of stores in the UK,” Phylactou said.
Phylactou, who has been with the company for seven years and stepped into his managing director role a year ago, sees the UK as a “sleeping giant” in the pizza industry.
‘We’re back’
Rebecca Carroll, marketing director at Papa John’s UK, is tackling Papa John’s brand visibility.
“Customers are aware of us, but they don’t necessarily consider buying from us,” she said. “They recognise our logo, but there’s a real opportunity for us to drive [deep] awareness.”
Carroll, who used to be the local marketing head at Deliveroo and head marketing manager at Domino’s Pizza, said they could recapture customer interest and loyalty by honing in on Papa John’s “Better Ingredients, Better Pizza” slogan.
She said the company supports local marketing by creating national advertising for its franchisees.
Whilst being selective about new partnerships, Phylactou cited “massive white space opportunities” in nontraditional locations such as theme parks, stadiums, and fuel stations. "We're having some really good conversations with some incumbent partners and new partners as well."
Papa John’s UK’s transformation extends beyond store reorganisation. It has also refined franchise partner qualifications, citing the need to be “very prudent” in allowing “people to grow in the future.”
“Our largest franchise partner at the moment has 42 restaurants and the rest are smaller than that," Phylactou said.
After a period of restructuring and strategic investment, Phylactou is optimistic about the future. “We are on a growth trajectory, and we wanted to put it out there that we’re gonna say ‘We’re back.”
