Dive Brief:

• Papa Murphy's, the fifth largest pizza chain in the U.S., has hired North Point Advisors to "evaluate strategic alternatives," including a possible sale, according to a company release. The company made this announcement on the heels of its third-quarter earnings, which showed a same-store sales decline of 2.1%. 
• In 2017, Papa Murphy’s was the only chain in the top five to experience a decline in sales, dropping 2.19%, versus positive sales growth from Pizza Hut (2.58%), Domino's (10.5%), Little Caesars (4.56%) and Papa John's (2.99%). Papa Murphy's closed more than 60 locations throughout the past year amid slow sales. 
• A sale would fit a very busy mergers and acquisition year in the restaurant space that has seen a number of major brands — including Sonic, Bojangles, Tilted Kilt and Papa John's — go private or land on the acquisition rumor mill. 

Dive Insight:

Prior to Papa Murphy's founding in 1995, the take-and-bake category was relatively quiet in the $45 billion U.S. pizza space. Less than 10 years later, however, some of the bigger players — including Donatos, Papa John's and Pizza Inn — started testing take-and-bake offerings, underscoring the impact Papa Murphy's had at the time.   

By 2011, Papa Murphy's ranked No. 5 on Forbes list of the top 20 restaurant franchises to buy and, by 2014, the company joined the Nasdaq Stock Market at around $11 per share. The company peaked in July 2015, around $21.50, but has dwindled. Shares now hover around $5. 

Now, the company is exploring a sale, and the idea of a private equity firm fixing the fundamentals and turning the company around has excited investors.

One of Papa Murphy's biggest differentiators has always been its convenience — easing the stressful last-minute dinner decision by offering a quick and simple solution. And while the brand has made big strides in consumer-facing technologies — rolling out a new online platform, expanding delivery and launching a new mobile app — so has every other brand. Aggressive technology and delivery initiatives have diminished much of the friction between consumer and brand across the restaurant industry, and picking up an uncooked pizza and cooking it at home no longer seems that convenient. 

In addition to a competitive restaurant space, Papa Murphy's has also had to contend with the burgeoning meal kit space. The meal kit category is growing more than three times as fast as other channels, according to Nielsen. If consumers want to do some of the cooking at home, they have more choices than just pizza. 

Perhaps Papa Murphy's biggest challenge is the improvement and diversification of frozen pizza, which has driven growth in this category. Mintel reports that more than one-third of consumers who purchase frozen pizza do so two or three times a month or more. According to Allied Market Research, the frozen pizza market is expected to grow at a rate of 6.4% through 2023. With competition coming from every direction, perhaps the best chance to keep up is a sale.