Papa Johns Bets on Local Roots to Reverse Sales Slump, Taps New Agency for Brand Revival

This analysis is based on original reporting from Marketing Dive. For ongoing coverage of marketing and advertising trends, subscribe to the free daily Marketing Dive newsletter.

In a decisive pivot, Papa Johns is returning to a community-focused marketing model as it battles a persistent sales downturn. The pizza chain reported a 5% drop in North American comparable sales for Q4 2025, marking its seventh decline in the last eight quarters. The slump underscores the broader challenges within the quick-service restaurant sector, which continues to navigate post-pandemic shifts and consumer belt-tightening.

Central to the turnaround plan is the re-establishment of local marketing cooperatives across 50 U.S. markets, encompassing most of its priority regions. This move effectively reverses a previous strategy that made local advertising optional for franchisees—a decision current CEO Todd Penegor, who joined in August 2024, has labeled a "big miss."

"By pooling resources at the regional level, our franchisees can execute more resonant, targeted campaigns," Penegor explained on a recent earnings call. "Nearly half of our systemwide sales in North America are now backed by these collaborative local advertising efforts."

The shift back to a localized approach comes after a brief, ill-fated experiment with a nationally concentrated model in 2024. That strategy increased per-store contributions to the national marketing fund but eliminated mandatory local spending—a trade-off that now appears to have weakened grassroots brand connections.

Complementing the co-op revival is a new creative platform developed with Leo Chicago, appointed agency of record in December 2025 after a review. The platform will succeed the "Meet the Makers" campaign, which previously boosted brand perception scores by highlighting ingredients and employees. Upcoming work will continue to emphasize ingredient simplicity but through what the company calls "culture-forward omnichannel storytelling."

The chain is pairing this marketing overhaul with operational pruning, planning to close 300 underperforming locations and streamline its menu. While Q1 is expected to remain soft, leadership hopes the combined effect of localized marketing, product innovation, and a new aggregator strategy will begin to improve results in the second half of 2026.

Industry Context & Analyst Perspective
The pizza category remains fiercely competitive, with Domino's asserting its dominance and Pizza Hut working to stabilize. Papa Johns' renewed local focus and estimated $22 million in supplemental marketing spend this year represent a clear attempt to reclaim relevance. However, analysts urge caution. "Relaunching co-ops is a logical step following restaurant closures, but we have medium confidence that menu innovation alone can reverse the sales trend," noted a recent BTIG report.

Voices from the Ground
We spoke to several industry observers for their take:

Michael Torres, Restaurant Consultant (Austin, TX): "This is back-to-basics 101. In a fragmented market, national one-size-fits-all messaging often falls flat. Empowering local co-ops could help Papa Johns better compete with the regional chains that truly own their neighborhoods."

Lisa Chen, Marketing Professor (Boston, MA): "The data is clear: hyper-localized marketing drives higher ROI for multi-location brands. The co-op model, combined with a sophisticated omnichannel narrative from Leo Chicago, could be the dual-engine strategy they need—if executed cohesively."

Dave Riggs, Former Franchisee & Industry Blogger (Chicago, IL): "This feels like too little, too late. They starved local stores of marketing funds for years while competitors ate their lunch. Now they're closing hundreds of locations and throwing a new ad campaign at the problem? It's a Hail Mary, not a strategy. The leadership team keeps changing, but the pizza doesn't."

Priya Sharma, Retail Analyst (New York, NY): "The focus on 'culture-forward' storytelling and the Michelin star publicity stunt show they're trying to attract younger, experience-driven consumers. It's a necessary evolution, but the core issue remains value and convenience in a saturated market."