Papa Johns this week reported its fourth consecutive year of positive North America comparable sales for 2023. While the brand’s full-year comps were up by 1%, that’s a far cry from its pandemic-era performances in 2020 (17.6%) and 2021 (11.8%).

But Rob Lynch, Papa Johns president and CEO, has a bold new plan to “become the QSR pizza brand of choice” worldwide.

He has dubbed the plan “Back to Better 2.0.”

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Touting 2023’s positive comps in a statement, Lynch added, “At the same time, we have made foundational improvements in our restaurant operations, digital solutions and marketing platforms as part of our efforts to evolve our business model for the next chapter of growth. As we look to the future, we are optimizing our investments in data science and our marketing tech stack to unlock value for both the top and bottom lines.”

In contrast to some other legacy pizza brands, Papa Johns has made menu innovation a top priority in the past couple of years, introducing items like the Doritos Cool Ranch Papadia, the Crispy Parm Pizza with a cheesy bottom, and Oreo Cookie Papa Bites, all with great fanfare.

For the fourth quarter of 2023, Papa John’s North America comparable sales were up 2% compared with the same quarter in 2022. Transaction and ticket growth delivered 2% comp sales at its company-owned restaurants in the U.S. and North America franchised restaurants. For the full year 2023, North America comparable sales were up 1% from a year ago.

But the chain isn’t where Lynch wants it to be just yet. So what’s the plan for 2024? He outlined three “strategic growth initiatives” for the North American market, including:

• A new marketing strategy: According to a press release, the brand “has identified significant opportunities to improve audience selection, offer differentiated category solutions, improve marketing return on ad spend (ROAS), sustain loyalty and create cultural buzz.” Franchisees in North America have agreed to pitch in, voting to increase their contributions to Papa Johns’ national marketing fund by 20% or 100 basis points of sales. “This will increase the productivity of their holistic marketing contributions by leveraging the scale national investments deliver,” the company said. Meanwhile, the brand has made local marketing optional for franchisees, “resulting in a net decrease in required marketing spend” and a chance to increase their overall profitability.
• Accelerated development in untapped and underserved markets: Papa Johns has identified new markets to pursue in 2024. Its new development incentive “will deliver significantly higher restaurant-level EBITDA margins during the first five years of operations” by waiving those franchisees’ contributions to the national marketing fund. That’s made possible, Papa Johns said, by the improved productivity and scale of its new marketing investments. The incentive “will significantly improve cash-on-cash paybacks for franchisees, add scale in key markets and attract growth-driven franchisees.”
  • Changes to the commissary business: Starting in 2024, Papa Johns will increase the fixed operating margin that its U.S. commissaries charge by 100 basis points in each of the next four years, moving from 4% today to 8% in 2027. To mitigate the higher costs, the chain will give franchisees new opportunities to earn annual incentive-based rebates as they grow their volume and open new stores. “Franchisees who increase case-volume purchases at the highest volume growth could realize target market rates lower than the current 4% rate in place today,” the company said. “Secondly, the incremental volume driven by increased marketing and additional development will reduce the shared supply chain costs across the system.” Papa Johns also expects to boost productivity throughout its supply chain with improved operations and supplier relationships.

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Lynch noted that Papa Johns has doubled its international footprint over the past 10 years and now has stores in 50 countries and territories. To keep building on that success, the company has several “transformation initiatives” in mind:

• Establishing international regional hubs: These hubs, in Asia Pacific, Europe, the Middle East, Africa and Latin America, will be led by experienced general managers and their teams. “These teams will align global best practices in operations, marketing and technology with local preferences and needs,” aiming to increase Papa Johns’ market share in key markets worldwide.
  • Increasing technology investments: Papa Johns will invest more in consumer-facing technology, digital infrastructure and enhanced reporting. By expanding ordering capabilities through its website and app and leveraging analytics, the brand “expects to improve purchase conversion, increase customer retention and deliver faster consumer insights to franchisees.”
  • Optimizing the UK business model: The UK is Papa Johns’ largest international market. To better capitalize on it, the company aims to improve operational efficiency, enhance the customer experience and drive profitability. The company closed multiple low-performing franchised restaurants in the fourth quarter of 2023, and more closures will follow in 2024, resulting in improved profitability for the remaining stores and strengthening Papa Johns’ franchisee base.

“It is our ambition to continue our positive momentum and to become the QSR pizza brand of choice for customers and franchisees around the world,” Lynch said. “We are excited about Papa Johns’ future as the initiatives that we are undertaking, combined with our premium positioning in the marketplace, supportive franchisee base and proven leadership team, will enable us to achieve our vision and deliver meaningful long-term value creation for all stakeholders.”