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Papa John's (PZZA) to Open 60 Restaurants in Kenya and Uganda

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Papa John's International, Inc. (PZZA - Free Report) recently announced that it is expanding into Sub-Saharan Africa with its latest franchise partner, Kitchen Express LTD. The move is in sync with its endeavor to strengthen global presence.

Kitchen Express LTD is planning to open 60 restaurants in Kenya and Uganda. The company will open four of these restaurants in 2022, with the first being in Nairobi. Amanda Clark, Papa Johns chief development officer said, “Establishing ourselves in Sub-Saharan Africa for the first time presents a great opportunity for Papa Johns to deliver on our BETTER INGREDIENTS. BETTER PIZZA. promise and continue our global momentum as a brand.”

In the last few years, Papa John's has forayed into countries like Spain, Portugal, Germany, Cambodia, Pakistan, France, Tunisia, Iraq, Morocco, Kazakhstan and Poland. In the past six months, shares of the company have gained 44.2%, compared with the industry’s growth of 2.3%.

Expansion to Act as a Key Growth Driver

Over the next several years, the Zacks Rank #2 (Buy) company plans to increase its international units, a large portion of which will be franchised. During the third quarter of fiscal 2020, the company collaborated with HB Restaurant Group to boost presence in the Philadelphia and southern New Jersey market. Under the development agreement, the company will open 49 new stores between 2021 and 2028. The company intends to tap growth opportunities in France and Italy. For fiscal 2021, Papa John’s expects to inaugurate between 220 and 260 net new restaurants globally. This represents approximately 4.5-5% growth in its system for the year.

During the fiscal third quarter, Papa John’s opened 14 new restaurants in North America and exited nine restaurants. In international markets, the company opened 32 new restaurants and exited 39 restaurants. As of Sep 26, the company had a global restaurant count of 5,569, across 50 countries and territories globally. The company expanded its partnership with Drake Food Service International to open more than 220 Papa John’s restaurants by 2025. This includes more than 170 stores across Latin America, Spain and Portugal. Drake Food Service also plans to open 50 new restaurants in the U.K. over the next four years. The company already purchased 60 Papa John’s restaurants in London — making it the brand’s largest franchisee in the country. Under the terms of this expanded partnership, Drake Food Service will operate more than 560 Papa John’s restaurants by 2025.

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