Papa Johns International, Inc. has been in the midst of a long development runway for several years now, as the Louisville, Ky.-based pizza chain catches up and tries to surpass its pre-2020 store portfolio levels. This year, Papa Johns reached the same number of stores it had before the pandemic, so now the company is at ground zero on its journey toward one day becoming the third-largest pizza chain in the U.S., Patrick Coelho, senior vice president of development for Papa Johns, said.

Although last year, store openings were fairly modest, with only 15 net new stores opened in 2022, according to the NRN 2023 Top 500 in partnership with Datassential, Papa Johns has signed multiple large development deals over the past couple of years, and in 2022, CEO Rob Lynch said that the company has plans to open 2,000 stores by 2025. The plan is to utilize new store designs, as well as nontraditional locations, to get the company back on track to the same pace of growth it has in the ‘90s.

“People don’t normally associate Papa John’s with growth,” Coelho said. “One of the things we want to start doing is figuring out how to make growth at the forefront of everything we do… Papa John’s is a really strong brand, but our footprint, especially in the U.S., is still very small compared to our potential. We hit really high growth in the mid-90s to early ‘00s, so I know our system can do it again…. Now we just have to capitalize on the potential of our brand here in the U.S.”

Currently, Papa Johns’ closest competitor is Little Caesars, which actually closed stores last year, according to the NRN Top 500 data, although the company is privately-held, so there is very little known about its current development strategy. Papa Johns might actually be taking a chapter from Domino’s book in utilizing fortressing as a way to embed the brand in a new or previously under-developed market. Coelho said that the company is trying out a new strategy that would see Papa Johns roll out 20+ remodels of stores, as well as opening 10 additional stores all in the same market. This strategy would allow Papa Johns to become top of mind for more customers in the same area.

Beyond fortressing, another development strategy that Papa Johns is implementing is to re-engage with franchisees. The company already made waves in recent years with the announcement of a 100-store deal with Sun Holdings, Inc. in 2021 — the largest development deal in the company’s history — and now the goal is to continue ramping up development incentives among current and potential future franchisees.

“We need to make some enhancements in order for us to really accelerate in a meaningful way,” Coelho said. “I think solidifying and re-engaging with existing franchisees for them to accelerate, and then in turn to attract new franchisees to the system [is important]. We’re making some changes to our commissary business … and trying to incentivize franchisees to grow with these really generous rebates.”

Of course, it’s not just development of any kind, but it’s about smart development: Coelho said that opening stores in nontraditional locations like transit and travel hubs, as well as developing in other areas of North America, especially in Canada. Coelho said that the new Epic Dough store model the company rolled out last year — with a sharp and updated modern take on a typical Papa Johns storefront — has especially been resonating with franchisees. Coelho said that the company is also on the verge of announcing a new store development program, which will eventually lead to the most aggressive growth the company has ever had in the U.S.

“We are continuing to set the foundation to be able to deliver accelerated growth,” Coelho said. “We have a lot of a lot of runway—believe it or not, there are some states that don’t have Papa Johns locations. So, there’s a lot of space out there.”

Original Article:
[H/T] RestaurantBusinessOnline.com