Operations

MTY Food Group set to close Papa Murphy’s locations, focus on profitability

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July 13, 2026

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MTY Food Group has started the process of closing up to 50 underperforming Papa Murphy's locations, choosing to focus instead on healthier, more profitable stores, the company said during its MTY Food Group Q2 earnings call.

Eric Lefebvre, MTY Food Group CEO, president and non-independent director, said the locations set to close were chosen based on a store-by-store process that evaluated performance outlook and the economic profile of each location. Overall, MTY Food Group franchises and operates nearly 80 brands throughout the U.S, Canada and additional international markets.

The Papa Murphy's closures are part of a cluster of 68 locations the company plans to close overall and include mostly company-owned locations, the company said. MTY owns 49 of the 50 Papa Murphy's locations set to close.

"Where we saw a path to improvement, we chose to continue investing efforts into making our existing assets as productive as they can be. Where the fundamentals no longer supported that path, we made the decision to close the store," Lefebvre said during the company's Q2 earnings call. "During the last 12 months, the locations that are set to close have collectively lost over $10 million, and their performance was for the most part deteriorating. The decision will reduce our store count in the near term, but we believe it is the right long-term action for the business."

The estimated cost of the closures and the termination of leases is expected to be between $10 million to $12 million.

"We continue to operate the business with discipline and focus on the factors we can control," Lefebvre said. "That includes driving strong cash generation, supporting our franchise network, advancing our new store pipeline, and taking action where we see opportunities to improve the quality and profitability of the business."

The store closures are expected to happen gradually to reduce operational stress.

"We've been slowly but gradually disposing of some stores where it makes sense for us," Lefebvre said. "It's not fire sale, but we're also in the process where we can reduce the corporate store portfolio."

Two years ago, MTY repossessed three clusters of Papa Murphy's stores in a large turnaround effort that saw some success. However, not enough to support a longer term commitment within those markets.

After nearly two years of efforts, "we came to the conclusion that these markets are probably not appropriate for Papa Murphy's at this time, and we chose to close a lot of these stores in these locations," Lefebrve said. "So there's a larger weight of Papa Murphy's restaurants (that are closing). That being said, they don't account for the majority of the losses or of the costs of the stores we're going to close. There are a certain number of other locations that will cost more and that also will draw bigger benefits."