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How Is Papa John’s Expanding Its Business?

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Mar. 5 2018, Updated 7:32 a.m. ET

Current operations

By the end of 4Q17, Papa John’s (PZZA) operated 708 domestic company-owned restaurants, 35 international company-owned restaurants, 2,733 domestic franchised restaurants, and 1,758 international franchised restaurants.

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Domestic company-owned restaurants

By the end of 4Q17, the segment operated 708 restaurants. In the last four quarters, the segment has increased its unit count by six. It opened nine new restaurants and closed three restaurants. Also, during the same period, the company acquired one restaurant from franchisees and refranchised one company-owned restaurant.

Domestic franchised restaurants

By the end of 4Q17, the segment operated 2,733 restaurants. Compared to 4Q16, the company operated six fewer restaurants in 4Q17. In the last four quarters, the company opened 110 restaurants and closed 116 restaurants.

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International company-owned restaurants

The segment operated 35 restaurants as of the end of 4Q17 compared to 42 in 4Q16.

International franchised restaurants

The segment operated 1,758 restaurants by the end of 4Q17 compared to 1,614 in 4Q16. In the last four quarters, the company has opened 257 units and closed 155 units. 

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Peer comparisons

During the last four quarters, Domino’s Pizza (DPZ) and Pizza Hut, operating under the umbrella of Yum! Brands (YUM), have increased their overall unit count by 1,045 units and 717 units, respectively.

Outlook

In 2017, the company added 137 units, which represents a unit growth of 2.7% from 5,097 restaurants in 2016. For 2018, the company’s management expects the net global unit growth to be in the range of 3.0% to 5.0%.

Next, we will look at Papa John’s 4Q17 EBIT margin.

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