Papa Johns Turns to Mexico as U.S. Sales Drop
Papa Johns reports an 8.3% decline in U.S. sales while its international arm sees a 1.5% rise in same-store sales. The chain has partnered with Mexico-based KM Capital to take over 44 restaurants, aiming to revive growth abroad.
Mexico Deal Gives New Growth Path
Papa Johns is turning its attention south of the border after a series of weak quarters in the United States. The company has announced a partnership with KM Capital, a Mexico-based investment firm founded in 1986, to acquire 44 existing Papa Johns restaurants. Enrique Ruiz Mandujano, KM Capital’s CEO, said the firm sees a strong pizza appetite in Mexico and intends to invest further in operations, branding and expansion. The move follows a strategy of focusing on priority markets and closing underperforming locations, a playbook Todd Penegor, Papa Johns’ CEO, has been applying abroad and now hopes to replicate it at home. The partnership is expected to be a bright spot in an otherwise challenging year for the brand.
International vs U.S. Performance
Papa Johns’ international business posted its seventh straight quarter of positive same-store sales, up 1.5% in Q2. In contrast, the U.S. business fell 8.3% over the same period. The chain operates roughly 6,000 restaurants across about 50 countries.
| Metric | Value |
|---|---|
| Q2 same-store sales growth (international) | 1.5% |
| Q2 same-store sales decline (U.S.) | 8.3% |
| Total restaurants worldwide | ~6,000 |
| Countries served | ~50 |
The data highlight a clear divergence between the U.S. market and the rest of the world.
Strategic Focus Under Todd Penegor
Under Penegor’s leadership, Papa Johns has been tightening its franchise portfolio. The company is closing underperforming locations to strengthen franchisee health and is looking to bring that same approach back to North America. The partnership with KM Capital is part of a broader effort to turn the brand’s fortunes around.
For more details on franchise performance, see our stats page. If you want to see how the brand’s growth strategy compares across markets, check out our fixtures data.
Looking Ahead
If Mexico continues to perform as KM Capital expects, the country could become one of the brighter chapters in Papa Johns’ growth story. The company’s international arm remains a key driver of overall performance, and the new partnership may help offset the decline seen in the U.S. market.
The chain’s next steps will likely involve further investment in Mexico and a reassessment of its U.S. strategy, with the goal of restoring profitability and franchisee confidence across all regions.
