Mon 5th Jun 2023 - Papa John’s makes shift in UK strategy with 91-site acquisition to form portfolio of company-owned restaurants Papa John’s makes shift in UK strategy with 91-site acquisition to form portfolio of company-owned restaurants: International pizza delivery brand Papa John’s has made a shift in its strategy for its UK business, with the acquisition of restaurants previously operated by the M25 division of Drake Food Service International (DFSI), and the subsequent formation of a portfolio of company-owned restaurants. The new corporate-owned restaurant portfolio will consist of 91 sites across London and other parts of the UK. It represents a shift in thinking for the pizza brand, which has traditionally let franchisees run all the restaurants in its international markets, of which with more than 500 sites, the UK is the biggest. The company said it sees opportunities to implement “operating model enhancements” including revenue management capabilities, product and technological innovation and operational efficiencies, to improve sales and restaurant-level profitability. Amanda Clark, chief international and development officer for Papa John’s, said: “The UK is important within our international footprint with the largest number of stores outside of North America, strong brand awareness with consumers and potential for long-term growth as we still have tremendous white space in the market. Owning and operating restaurants will allow Papa John’s to follow a similar model that we’ve created in the US, which enables us to leverage our resources, best practices and scale with franchisees in the UK and worldwide to further their success.” Financial terms of the transaction were not disclosed. Rob Payne, managing director of Papa John’s in the UK, said: “The investments we are making today, combined with our global resources and in-house expertise, will enable Papa John’s to drive higher sales going forward. Establishing a corporate-owned restaurant portfolio is one of many steps we are taking to reposition our UK portfolio in a way that ensures our franchisees and this market drive above average industry growth over the long-term. This announcement follows other initiatives we’ve undertaken including investments in marketing technology, pricing and operations.” As part of the transition, approximately 1,000 employees working for DFSI M25 will become team members of the company, which said that minimal, if any, disruption to customers is expected during the transition time. DFSI will continue to hold its master franchise rights for Papa John’s in Spain, Portugal, Chile and Central America. Fernando Frauca, managing partner and chief executive of DFSI, said: “By exiting our stake in the UK, we will be able to focus our efforts on our Papa John’s portfolio in Iberia and Latin America. We are proud to be a partner of this brand and look forward to continuing to invest in our other markets.” In March, Propel reported Papa John’s had seen turnover pass the £100m mark in the UK for the first time in 2021. The business reported revenue of £102,339,000 for the year ending 26 December 2021, up from £94,914,000 in 2020 and £73,165,000 in 2019, the last full year before the pandemic. Of the 2021 figure, £102,186,000 came from UK operations (2020: £93,867,000) and £153,000 from overseas (2020: £1,047,000). Pre-tax profits grew slightly from £8,031,000 in 2020 to £8,103,000 (2019: 2,820,000). Papa John’s features in the Propel Turnover & Profits Blue Book, the latest edition of which will be sent to Premium subscribers on Friday (9 June). Its turnover of £102,339,000 is the 69th highest in the database. Its pre-tax profit of £8,103,000 is the 65th highest in the database. The Blue Book ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription.