Papa Johns unveils ‘Unbox Better’ plan amid continued sales slump

Executive Editor,Nation's Restaurant News

Papa Johns 'Unbox Better' plan is aimed at 'strengthening the brand and the system'Photo courtesy of Papa Johns

Papa Johns has been doing a bunch of consumer research throughout the past six months to understand what guests are saying about the brand. The work is critical as the pizza chain continues to navigate negative sales. In the third quarter, reported this morning, North America same-store sales decreased 8.3% from the same period a year ago, with domestic company-owned restaurants down 7.5% and franchised restaurants down 8.5%.

Notably, the system also reported -8.3% in the second quarter. Outside of Q2 2025, the company has experienced quarterly declines in the past nine out of 10 periods.

In a statement, CEO Todd Penegor said third quarter results “reflect continued pressure in a competitive operating environment.” But in an interview, he outlined a new enterprise-wide blueprint, called “Unbox Better,” designed to navigate a tough macroenvironment, including an intensifying pizza category.

"The plan is built around two priorities: strengthening our brand by giving customers more reasons to visit and strengthening our system to consistently deliver on their expectations," he said, adding that the strategy covers all aspects of the business, from menu innovation to operations to marketing.

“We are known for Better Ingredients, Better Pizza, but we’ve discovered that consumers can’t tell us why. We have the opportunity to amplify why,” Penegor said. “What consumers told is we have the right to play on a higher quality positioning but they’re not sure we’re delivering on that promise every day.”

So, Papa Johns has recommitted to in-restaurant training, for instance. The company also expects its new point-of-sale system to be fully deployed systemwide by the end of 2027. Penegor said the current system is 35 years old and requires cumbersome and manual tasks.

“[The new system] will free up some time so employees can focus on making great pizzas again,” he said.

There is also a marketing piece to Unbox Better, aimed at “bringing consumers along on the journey” of this plan. Next week, Papa Johns will launch a “Bounceback” campaign, encouraging customers to take a picture of their pizza and submit it for a free large one-topping pizza. Penegor said the company’s AI algorithm will scan pizzas and garner feedback to understand what improvements need to be made, whether that’s “amping up” cheese flavor or optimizing the dough or something else.

“We want feedback from customers because we know they have a lot of choices and we need to earn it,” he said. “You’ll see us coming back to [consumer feedback] during 2027 on several occasions to really earn trust and truly own quality. That’s the journey we’re on.”

Such feedback will provide “fuel” to turn around sluggish sales, he added. The company is also helping franchisees on this "journey" and has approved going back to a 5% national ad fund, from the current 6%, and bumping up the local ad fund to 2% from 0%.

“We’re aligned to get all [local marketing] co-ops stood back up to where we were prior to 2024 and it’s full steam ahead,” Penegor said, adding that 98.5% of the franchise system voted in favor of these contributions.

As an additional incentive, Papa Johns is bolstering franchisees’ commissary margin support by 100 basis points and reducing tech fees by another 25 basis points.

“We’re helping the system to make sure we’re all fueling the fight,” Penegor said. “That is intentional to get them in a position to make sure we ‘Unbox Better.' It's not just a story, it’s a promise to continually get better.

“This is a holistic strategy around owning quality again and to make sure we earn the trust of our consumers.”

There are seven focus areas within the Unbox Better plan, including:

• Food worth choosing, through better pizza and a broader menu
• Bring the brand to life, with consistency through every touchpoint
• Deliver great value, with compelling offers that incent return visits
• Deepen customer connection, through relevant marketing, personalization, and loyalty
• Deliver on every promise, every pizza every time, including a focus on training and operational excellence
• Reach more customers by expanding its footprint and modernizing restaurants
• Help franchisees thrive, with the previously mentioned support

Third quarter by the numbers

• Global systemwide restaurant sales were $1.15 billion, a 5.6% decrease compared with the prior year third quarter

• North America comparable sales decreased 8.3% from a year ago as comparable sales from domestic company-owned restaurants were down 7.5% and North America franchised restaurants were down 8.5%

• International comparable sales decreased 1.8% compared with the prior year third quarter

• Opened 47 new restaurants systemwide, comprised of 11 restaurant openings in North America and 36 restaurant openings in International markets

• Net income was $3 million compared with $4 million in the prior year third quarter

• Adjusted EBITDA was $38 million compared with $48 million in the prior year third quarter

Contact Alicia Kelso at [email protected]

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