Papa Johns sells majority stake in 90-unit Texas joint venture to Sun Holdings

Sun Holdings’ purchase of 90 restaurants from Papa Johns comes on heels of 100-unit development agreement with pizza franchisor

Papa Johns has sold its majority stake in 90 Papa Johns restaurants in Texas to Sun Holdings, one of the pizza chain’s largest franchisees. In the joint venture between Papa Johns and Blue and Silver Ventures, Ltd., the latter’s share will stay the same.

The strategic franchising by Papa Johns comes on the heels of a major development deal with Sun Holdings. Including in Texas, the franchisee agreed to open 100 new restaurants in strategic, high-growth markets by 2029.

Prior to refranchising, the 90 units produced $4.8M in net income for Papa Johns in 2021, according to its 8-K filing with the Securities and Exchange Commission (SEC). Since the refranchising would produce proforma $4.7M, Papa Johns expects the net financial impact of the transaction to be neutral to earnings moving forward.

“Sun Holdings is a proven, well-capitalized operator who understands our ambitious goals to expand the footprint of our brand,” said Amanda Clark, chief development officer at Papa Johns. “We will continue to build new corporate restaurants as well as refranchise when we can provide our franchisees strategic scale to support the brand’s long-term growth, with this deal as a great example.”

To grow, executives have found success with efforts to revitalize the Papa Johns’ brand, including a recent rebranding and concept prototype. In addition, a new HQ will open in Atlanta this summer. On the international front, the pizza chain announced its largest franchise deal. A partnership with FountainVest Partners will bring 1,350 new units to South China by 2040.

[Related article: Papa Johns rebrands, unveils concept store]

“We are excited to partner on an even larger scale with Papa Johns, an innovative brand that is well-positioned in the QSR industry and has already begun to deliver a high return on our investment,” said Guillermo Perales, president and chief executive of Sun Holdings. “We look forward to growing together and are thankful to the team at Papa Johns for the trust they are placing in Sun Holdings.”

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