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Papa John’s Closes Largest U.S. Franchisee Development Deal

Franchisee operator Sun Holdings will oversee the opening of 100 new Papa John's stores in high-growth markets across Texas by 2029.

  • Papa John’s has signed a deal with franchisee operator Sun Holdings, Inc. to open 100 new stores in Texas by 2029.
  • CEO Rob Lynch said Sun Holdings is “the first major franchisee that has come into our system, which really lends credibility to the model we’re building.”

Related: Papa John’s makes another push to hire 20,000 new workers

Papa John’s said it has signed the largest domestic franchisee development agreement in the company’s history with top U.S. franchisee operator Sun Holdings, Inc.

Sun Holdings will oversee the opening of 100 new stores in high-growth markets across Texas by 2029. Founded by Guillermo Perales, the Dallas-based Sun Holdings supports more than 1,000 locations across 12 states. It has been ranked the third largest franchisee in the U.S. and awarded the MUFSO Golden Chain Award and Nation’s Restaurant News’ Top 10 Power List.

“Papa John’s development flywheel has started to take off,” said Amanda Clark, Papa John’s chief development officer, in a statement. “With industry-leading paybacks and our key strategy of making it easy for franchisees to say yes to developing, we can attract great new partners to our brand.”

In an interview with Nation’s Restaurant News, Papa John’s CEO Rob Lynch said, “We’ve had some big wins over the past six to eight months, and now this is the first major franchisee that has come into our system, which really lends credibility to the model we’re building.”

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Lynch added that Perales “loves the unit economics, the low investment level, especially relative to traditional drive-thru QSR with similar AUVS. He came into our company with the intention to build rapidly.”

In a statement, Perales said Sun Holdings “has taken a long-term, disciplined approach when making growth investments. Papa John’s fits our criteria perfectly. We see tremendous potential in this premium brand, backed by an innovative culture and highly attractive economics. We know Texas well and see an immense opportunity to grow Papa John’s across this dynamic region.”

In the first half of 2021, Papa John’s reported record net unit growth, as franchisees accelerate their opening plans for new locations within the current development pipeline. In addition to strong interest from prospective franchisees, the company continues to add to its development pipeline through agreements with current Papa John’s franchisees.

Recently, the company announced that Drake Food Service International, which operates more than 280 locations across Latin America, Spain and Portugal, will open over 220 new restaurants across Latin America, Spain, Portugal and the UK, in addition to acquiring over 60 locations in the UK.