Dive Brief:
- Papa ZHS, a 15-unit Papa Johns franchisee, filed for Chapter 11 bankruptcy protections this week, according to court filings.
- Papa ZHS and its affiliates operate 11 units in Pennsylvania and four in Ohio, according to a court filing.
- The operator hasn’t yet stated a reason for bankruptcy, but franchisor Papa Johns has struggled with negative same-store sales for several quarters, including an 8.3% decline during the third quarter, and has closed hundreds of underperforming locations.
Dive Insight:
Papa ZHS is owned by Yasir Hussain, who has more than two decades of experience in the pizza industry and became a Papa Johns franchisee in 2019. He began his career in pizza as a dishwasher and worked his way up to restaurant manager, overseeing multiple locations. As of 2025, he owned and operated 12 units, including Papa Johns’ 6,000th restaurant. At the time, Hassan had plans to continue growing within the Cleveland area.
Last week, Papa Johns shared its latest business strategy, called “Unbox Better,” which focuses on improving the chain’s performance by positioning it as a quality leader. The initiative includes retraining workers and offering additional support for underperforming restaurants. The brand is also re-establishing local marketing co-operatives to boost local brand awareness and will use a combination of discounts, premium products and limited-time offers to drive traffic.
Other restaurant franchisees have faced financial problems this year thanks to rising costs and low traffic as consumers pull back on spending. In fast food, large franchisees from Carl’s Jr., Hardee’s and Wendy’s declared bankruptcy this year. Casual chains also haven’t been spared from franchisee bankruptcies, with operators from Denny’s, Outback Steakhouse and Applebee’s filing for Chapter 11 this year. Experts say that the level of franchisee bankruptcies is unlikely to abate in the next year unless inflationary pressures and economic trends improve.
