Dive Brief:
- Papa John's plans to open a new global headquarters in the Metro Atlanta area where menu innovation, marketing, customer experience, human resources, communications, development functions and diversity, equity and inclusion teams will be located, according to a press release. IT, supply chain and legal teams will remain in its Louisville, Kentucky, headquarters. The company will also maintain its headquarters outside of London, where its international operations are managed.
- The company is currently in discussions with a number of potential office locations, and expects to complete the selection process by the end of 2020. The Atlanta location is expected to open in the summer of 2021. The organizational changes and new headquarters aren’t expected to impact company-owned or franchised stores or its network of quality control centers.
- With Papa John's switching into growth mode following months of strong same-store sales growth during the pandemic, the company is moving a bulk of its operations to one of its largest corporate-owned restaurant markets where it would have better access to an airport with connections to domestic and international markets, Rob Lynch, Papa John's president and CEO, said in the release.
Dive Insight:
After signing its largest franchisee deal in North America in 20 years, Papa John's continues to clear a path toward rapid expansion. A new headquarters that will better position it to connect corporate with new and existing franchisees will only help the pizza chain expand in the U.S. and beyond. It will also provide the chain with a larger job market, which will help it build its corporate team.
Moving a bulk of its operations to a new market can be risky, though, as Applebee's proved in 2015 when it moved from Kansas City, Missouri, to California, which led to big changes across its brand management. Ultimately, same-store sales declined the following year. But when Chipotle consolidated its offices in Denver and New York to California in 2018, things worked out better in the long term. Since 2019, Chipotle has reported strong same-store sales growth and has had little negative impact from the pandemic on its comp sales this year.
Despite the potential risk of losing talent, Papa John's could gain more by way of a diverse job market and will be better able to be on the ground testing new menu items and tech innovations within its largest corporate-owned restaurant market. Atlanta is home to popular brands like Chick-fil-A, Huddle House, Waffle House and Moe's Southwest Grill, so there will be plenty of restaurant talent available in this market, as well.
