What changed in this filing

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Item 1. Business

2024-02-29 compared with 2023-02-23 · 99 added, 71 removed, 167 unchanged (50% of the section changed)

Papa John’s International, Inc., a Delaware corporation (referred to as the “Company,” “Papa John’s,” “Papa Johns” or in the first person notations of “we,” “us” and “our”), operates and franchises pizza delivery and carryout restaurants and, in certain international markets, dine-in and delivery restaurants under the trademark “Papa John’s.” Papa John’s began operations in 1984.

At December 31, 2023, there were 5,906 Papa John’s restaurants in operation, consisting of 648 Company-owned and 5,258 franchised restaurants operating in 50 countries and territories.

Our Company-owned restaurants include 98 restaurants operated under three joint venture arrangements.

All of our International restaurants are franchised.

In discussions of our business, “Domestic” is defined as within the contiguous United States, “North America” includes Canada, and “International” includes the rest of the world other than North America.

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We also top our pizzas with our signature pizza sauce made with vine-ripened tomatoes, real cheese and meat full of flavor, not filler.

Our marketing and menu strategies focus on menu innovations that provide both value and variety to our customers, but importantly, do not add significant complexity to our restaurant operations or to supply chain needs.

Over the past three years, we have made purposeful additions to our menu, ensuring these additions are well-timed for our growth, without sacrificing our premium quality.

Our marketing and menu strategies focus on craveable products that provide both value and variety to our customers, drive sales and importantly, do not add significant complexity to our restaurant operations or to supply chain needs.

We continue to make purposeful additions to our menu, ensuring these additions are well-timed for our growth, without sacrificing our premium quality.

This deliberate strategy focuses on innovation that adds value to our system rather than short-term discounts, contributing to more productive ticket growth and, most importantly, higher customer satisfaction.

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Improve unit-level profitability and performance of our Company and franchisee restaurants .

We have been intent on taking proactive steps to drive profitable growth, especially under the current challenging operating environment.

This includes growing ticket and transactions through menu innovations, customer insights and strategic pricing actions.

We continue to take proactive steps to drive profitable growth through targeted strategies.

This includes growing ticket and transactions through menu innovations, customer insights, media efficiency, strategic pricing actions and development incentives.

In addition to increasing average unit volumes, our strategy focuses on further sharpening our execution and driving BETTER customer experience for faster service while optimizing labor allocation, enhancing operational efficiencies and effectively managing margins.

We continue to look for ways to incent growth and improve restaurant margins.

Beginning in 2024, we will increase the fixed operating margin that our Domestic commissaries charge.

At the same time, we are offering new opportunities for our franchisees to earn annual incentive-based rebates as they increase volume and open new restaurants, which will drive continued supply chain productivity for our system.

See “Recent Business Matters” in Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Leverage our technology infrastructure to drive our business operations.

We utilize technology to deliver a better customer experience, improve operational efficiencies and inform our decision-making .

Approximately 85% of our Domestic sales are through digital channels, including website, apps, third party aggregators, and centralized call centers, providing a significant competitive advantage when compared with other QSR models.

We are continuously investing in technology to enhance our digital capabilities for both our customers as well as our employees.

Our loyalty program (“Papa Rewards”) and one-to-one marketing platforms help us retain loyal customers and attract new ones.

We also partner with top domestic delivery aggregators to meet customer demand for our products.

Aggregators have also helped navigate the labor shortage that the Company is experiencing by providing supplemental delivery drivers, especially during peak times when our delivery teams are working at full capacity.

Approximately 85% of our Domestic sales are through digital channels, including website, apps, third party aggregators, and centralized call centers.

We believe that this technology leadership edge provides a competitive advantage when compared with other QSR models.

We continue to invest in technology and data science to enhance our digital capabilities for both our customers as well as our employees.

We remain committed to meeting customers where they want to order from us and to giving them high quality innovative products, providing great value, and delivering excellent service, regardless of the channel in which they order.

Our loyalty program (“Papa Rewards”) and one-to-one marketing platforms help us retain loyal customers and drive frequency and ticket on our own ordering channels.

We have also been a leader in the use of third-party domestic delivery

aggregators since 2019.

A s new national pizza chains arrive on the platform, the pizza category has continued to expand its share of the overall aggregator market because it’s a great product for home delivery .

Our integrations with the aggregator marketplaces and our nationwide integration with a third-party delivery service provider have been key tools allowing us to continue to meet our customers in the channel of their choice.

The “on-demand” labor that the aggregators provide through their “delivery as a service” model allows us to increase our volume in growing day parts like lunch and late night, when the unpredictable demand can make it difficult to predict staffing needs.

Profitably expand our footprint domestically and internationally.

We continue to pursue a growth strategy by expanding our footprint, both domestically and internationally.

We partner with large local investors to expand into new regions and markets, seeking to ensure our partners are aligned with our strategic priorities and committed to the Papa Johns brand.

Nearly all of our top-25 North American franchisees now have development agreements in place.

Internationally, our teams

are laying the groundwork for the future by accelerating growth in our established markets, identifying attractive new markets to enter and attracting new well-capitalized franchisees to partner with.

We partner with growth-oriented operators to expand into new regions and markets, seeking to ensure our partners are aligned with our strategic priorities and committed to the Papa Johns brand.

The majority of our top-25 North American franchisees have development agreements in place.

As part of our previously announced International Transformation initiative, we are evolving our International business structure to strengthen our operational effectiveness and better position our key markets for profitable growth.

These steps include establishing International regional hubs, increasing technology investments and optimizing our UK business model.

See “Recent Business Matters” in Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Part II, Item 8.

Financial Statements and Supplementary Data, Notes 16.

Restructuring and 25.

Subsequent Events to the Financial Statements for additional details.

A large majority of Papa John’s restaurants are franchised.

We believe a franchised model provides resiliency of earnings and presents us with an opportunity to enhance growth with less capital investment than a traditional company-operated restaurant model.

We seek to attract and retain franchisees with experience in restaurant or retail operations and with the financial resources and management capabilities to open single or multiple locations.

We seek to attract and retain franchisees with experience in restaurant or retail operations and with the financial resources and management capabilities to open and operate multiple locations.

While each Papa John’s franchisee manages and operates its own restaurants and business, we devote significant resources to providing franchisees with assistance in restaurant operations, quality assurance, technology, training, marketing, site selection and restaurant design.

Papa John’s franchise owners benefit from our award-winning brand, food service capabilities and the Papa John’s digital and delivery model.

We recently introduced a new development incentive for our U.S.

franchisees designed to accelerate unit growth in 2024 and 2025 and reward growing franchisees.

Qualified openings will be eligible for a reduction in Papa John’s Marketing Fund, Inc.

(“PJMF”) contributions over a multi-year period.

The value of this incentive is intended to significantly improve restaurant profitability in the initial years of operations, thus improving overall unit economics, strengthening the business case for new store development.

We also introduced a new marketing strategy, lowering total advertising fees paid by franchisees while improving efficiency and return on ad spend.

See “Recent Business Matters” in Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Segment Overview

Papa John’s has four defined reportable segments:

Domestic Company-owned restaurants, North America franchising, North America commissaries (Quality Control Centers), and International operations.

Domestic Company-owned restaurants, North America franchising, North America commissaries (Quality Control Centers), and International.

Domestic Company-owned Restaurants

The Domestic Company-owned restaurant segment consists of the operations of all Domestic Company-owned restaurants and derives its revenues principally from retail sales of pizza, Papadias, and side items, including breadsticks, Papa Bites, cheesesticks, chicken poppers and wings, dessert items and canned or bottled beverages.

The Domestic Company-owned restaurant segment consists of the operations of all Domestic Company-owned restaurants and derives its revenues principally from retail sales of pizza, Papadias, and side items, including breadsticks, Papa Bites, cheesesticks, boneless chicken wings and bone-in chicken wings, dessert items and canned or bottled beverages.

Of the total 3,433 North American restaurants open as of December 31, 2023, 531 units, or approximately 15% , were Company-owned.

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North America commissary

The North America commissary segment comprises 11 full-service regional dough production and distribution Quality Control Centers (“QC Centers”) in the United States, which supply pizza sauce, dough, food products, paper products, smallwares and cleaning supplies twice weekly to each traditional restaurant served.

The North America commissary segment comprises 11 full-service regional dough production and distribution centers (Quality Control Centers, or “QC Centers”) in the United States, which supply pizza sauce, dough, food products, paper products, smallwares and cleaning supplies twice weekly to each traditional restaurant served.

This system enables us to monitor and control product quality and consistency while lowering food and other costs.

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International

International franchisees are defined as all franchise operations outside of the United States and Canada.

As of December 25, 2022, there were 2,330 International restaurants, all of which are franchised.

The International segment principally consists of distribution sales to franchised Papa John’s restaurants located in the UK and our franchise sales and support activities, which derive revenues from sales of franchise and development rights and the collection of royalties from our International franchisees.

The Company currently operates one International QC Center, which is in the UK.

The International segment is defined as all restaurant operations outside of the United States and Canada.

As of December 31, 2023, there were 2,473 International restaurants, comprised of 117 Company-owned restaurants in the UK and 2,356 franchised restaurants.

The Company currently operates one International QC Center in the UK.

The International segment also consists of distribution sales to Papa John’s restaurants located in the UK and our franchise sales and support activities, which derive revenues from sales of franchise and development rights and the collection of royalties from our International franchisees.

Other QC Centers outside North America are operated by franchisees pursuant to license agreements or by other third parties.

All other business units that do not meet the quantitative thresholds for determining reportable segments, which are not operating segments, we refer to as “all others.” These consist of operations that derive revenues from franchise contributions to our marketing funds and the sale, principally to Company-owned and franchised restaurants, of information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms, and printing and promotional items.

All other business units that do not meet the quantitative thresholds for determining reportable segments, which are not operating segments, are referred to as “all others.” These consist of operations that derive revenues from franchise contributions to our marketing funds and the sale, principally to Company-owned and franchised restaurants, of information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms, and printing and promotional items.

In the fourth quarter of 2023, the Company sold Preferred Marketing, our previously wholly-owned print and promotions company.

Se e “Note 22.

Divestitures” of “ Notes to Consolidated Financial Statements ” for additional information.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Note 23.

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At December 31, 2023, there were 5,906 Papa John’s restaurants operating in 50 countries and territories , as follows:

Domestic Company-owned Franchised North America Total North America International (a)

Beginning - December 26, 2021 600 2,739 3,339 2,311 5,650

Domestic Company Owned Franchised North America Total North America International Company Owned International Franchised Total International System-wide

December 25, 2022 (a)

522 2,854 3,376 — 2,322 2,322 5,698

Opened 5 87 92 — 234 234 326

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Refranchised (4) 4 — (1) 1 — —

Suspended (a)

— — — (188) (188)

Ending - December 25, 2022 522 2,854 3,376 2,330 5,706

Net unit growth/(decline) (a)

December 31, 2023 531 2,902 3,433 117 2,356 2,473 5,906

Net unit growth/(decline)

9 48 57 117 34 151 208

______________________________

(a) As previously disclosed, the Company has suspended corporate support for all franchised restaurants located in Russia.

These suspended restaurants are excluded from net unit growth calculations.

Our Company-owned restaurant growth strategy is to continue to open Domestic restaurants in existing markets as appropriate, thereby increasing consumer awareness and enabling us to take advantage of operational and marketing scale efficiencies.

Our experience in developing markets indicates that market penetration through the opening of multiple restaurants in a particular market results in increased average restaurant sales in that market over time.

We have co-developed Domestic markets with some franchisees or divided markets among franchisees and will continue to use market co-development in the future, where appropriate.

(a) Restaurant figures as of December 25, 2022 have been revised from previous presentations as eight international units were re-classified as closed locations following a review of temporary restaurant closures.

Our Domestic Company-owned restaurant growth strategy is to continue to open restaurants in existing markets as appropriate, thereby increasing consumer awareness, increasing market share, improving customer service and enabling us to take advantage of operational and marketing scale efficiencies.

We have co-developed Domestic markets with some franchisees or divided markets among franchisees and will continue to use market co-development in the future, where

Our Domestic Company-owned markets are comprised of strong performing restaurants and make them attractive locations either as Company-owned or franchised.

Our experience in developing markets indicates that market penetration through the opening of multiple restaurants in a particular region results in increased average restaurant sales over time.

We will establish a development or a master franchise agreement with a franchisee for the opening of a specified number of restaurants within a defined period of time and specified geographic area.

Similarly to our Domestic Company-owned restaurant growth strategy, our International strategy has shown to build higher consumer awareness, increased market share, and improved operational efficiencies.

In the second and third quarters of 2023, we acquired 118 formerly-franchised restaurants in the UK as Company-owned restaurants.

We recently announced International Transformation initiatives intended to enhance the profitability and cash flow of our UK portfolio and ensure alignment of the region and its performance with our long-term strategy.

See “Recent Business Matters” in Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 8.

Financial Statements and Supplementary Data, Notes 16.

Restructuring and 25.

Subsequent Events to the Financial Statements for additional details.

Franchise Program

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We enter into development agreements with our franchisees in North America for the op ening of a specified number of restaurants within a defined period of time and specified geographic area.

The franchise agreement is generally executed once a franchisee secures a location.

A franchise agreement is generally executed once a franchisee secures a location.

Our current standard franchise agreement requires the franchisee to pay a royalty fee of 5% of sales, and the majority of our existing franchised restaurants have a 5% contractual royalty rate in effect.

Incentives to franchisees offered from time to time may reduce the contractual royalty rate paid.

Incentives offered from time to time to franchisees may reduce the contractual royalty rate paid.

Substantially all existing franchise agreements have an initial 10-year term with a 10-year renewal option.

We have the right to terminate a franchise agreement for a variety of reasons, including a franchisee’s fai lure to make payments when due or failure to adhere to our operational policies and standards.

Many state franchise laws limit our ability as a franchisor to terminate or refuse to renew a franchise.

However, many state franchise laws limit our ability as a franchisor to terminate or refuse to renew a franchise.

International Development and Franchise Agreements.

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The remaining terms applicable to the operation of individual restaurants are substantially equivalent to the terms of our Domestic franchise agreement.

Development agreements will be negotiated at other-than-standard terms for fees and royalties, and we may offer various development and royalty incentives.

In certain cases, development agreements may be negotiated at other-than-standard terms for fees and royalties, and we may offer various development and royalty incentives.

Franchise Operations.

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Marketing Programs

Our Domestic marketing strategy consists of both national and local components.

Our national strategy includes national advertising via television, print, direct mail, digital, mobile marketing and social media channels.

Our Domestic marketing strategy consists of national advertising via television, print, direct mail, digital, mobile marketing and social media channels.

Our digital marketing activities have increased significantly over the past several years in response to increasing customer use of online and mobile technology.

Local advertising programs include television, radio, print, direct mail, store-to-door flyers, digital, mobile marketing and local social media channels.

Domestic Company-owned and franchised Papa John’s restaurants within a defined market may be required to join an area advertising cooperative (“Co-op”).

Local advertising, such as television, radio, print, direct mail, store-to-door flyers, digital, mobile marketing and local social media channels is optional for franchisees.

Domestic Company-owned and franchised Papa John’s restaurants within a defined market may, but are not required to, join an area advertising cooperative (“Co-op”).

Each member restaurant contributes a percentage of sales to the Co-op for market-wide programs, such as television, radio, digital and print advertising, and sports sponsorships.

The rate of contribution and uses of the monies collected are determined by a majority vote of the Co-op’s members.

The restaurant-level and Co-op marketing efforts are supported by media, print, digital and electronic advertising materials that are produced by Papa John’s Marketing Fund, Inc.

The national marketing efforts are supported by media, print, digital and electronic advertising materials that are produced by Papa John’s Marketing Fund, Inc.

(“PJMF”), our national marketing fund.

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Our team members are critical to our success.

As of December 25, 2022, we employed approximately 12,000 persons, of whom approximately 9,600 were team members at Company-owned restaurants, approximately 700 were management personnel at Company-owned restaurants, approximately 700 were corporate personnel and approximately 1,100 were QC Center and our print and promotions subsidiary personnel.

As of December 31, 2023, we employed approximately 13,200 persons, of whom approximately 10,600 were team members at Company-owned restaurants, approximately 700 were management personnel at Company-owned restaurants, approximately 700 were corporate personnel and approximately 1,200 were QC Center team members.

Our team members are non-unionized, and most restaurant team members work part-time and are paid on an hourly basis.

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As such, we welcome all entrepreneurial spirits, innovators and pizza lovers.

We are building a culture that both reflects our corporate values of People First and Everyone Belongs and creates a competitive advantage in attracting and retaining talent.

Across our restaurants, Quality Control Centers and corporate hubs, Papa Johns team members are valued for their contributions, treated equitably, encouraged to share their feedback and ideas, provided the tools needed to ensure their safety and total wellness and given ample opportunities to grow in their careers.

After being recognized by Forbes in 2021 as one of America’s Best Employers for Diversity, Papa John’s joined Forbes’ annual list of the World’s Best employers in 2022.

We were honored to rank #1 amongst all pizza companies and #2 in the entire restaurant category.

Also, for the second year in a row, we received a score of 100 on the Human Rights Campaign Foundation’s 2022 Corporate Equality Index.

We continue to build a culture that reflects our corporate values of People First and Everyone Belongs and creates a competitive advantage in attracting and retaining talent.

Across our restaurants, QC Centers and corporate hubs, Papa Johns team members are valued for their contributions, treated equitably, encouraged to share their feedback and ideas, provided the tools needed to ensure their safety and total wellness and given ample opportunities to grow in their careers.

Papa Johns has received several external recognitions for 2023 for its efforts in the area of diversity, equity and inclusion, The Best Employers for Diversity and World’s Best Employers 2023 by Forbes and America’s Greatest Workplaces for Diversity, Women, LGBTQ+ and Job Starters 2023 by Newsweek.

Creating an inclusive and diverse culture that supports and values team members is important to attracting and retaining talented, dedicated employees.

We’re implementing initiatives to diversify our workforce and leadership pipeline by attracting, recruiting, developing and supporting talent who represent our customers and communities, to embed policies and practices that ensure fairness, build trust and hold ourselves accountable, and to instill and reward behaviors across the organization that foster belonging and increase employee engagement.

We have also initiated multiple corporate initiatives over the past several years, including required unconscious bias training for team members, annual Diversity, Equity, and Inclusion training for all team members, the launch of The Papa John’s Foundation for Building Community, our Day of Service with Boys and Girls Clubs of America, and the creation of eight global inclusion resource groups with leaders engaging across the organization.

We have implemented initiatives to diversify our workforce and leadership pipeline by recruiting, developing and supporting talent who represent our customers and communities, to embed policies and practices that ensure fairness, build trust and hold ourselves accountable, and to instill and reward behaviors across the organization that foster belonging and increase employee engagement, including required unconscious bias training for team members, and annual Diversity, Equity, and Inclusion (“DEI”) training for all team members, grant-making through the Papa John’s Foundation to national and local nonprofit partners for advancing DEI, our annual Week of Service and our eight global inclusion resource groups with leaders engaging across the organization.

Talent Attraction, Retention and Development

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Our goal to help all Papa John's employees succeed begins with efforts to attract and recruit a wide range of people from different backgrounds, cultures, education experiences, religions and other indicators of diversity because we know a workforce that reflects the diversity of our customers and communities brings more innovative thinking and better ideas and solutions to our business.

In 2022, we expanded our efforts to recruit diverse talent by implementing anti-bias training for our recruiters.

To meet job candidates where they live, and gain a deeper understanding of their personal, educational and professional goals, we sponsor and attend job fairs, scholarship programs and university and professional organization events.

Our recruiting strategy aims to diversify the candidate pool for all manager level and above positions.

We offer our team members hiring and referral bonuses as well as expanded health, wellness and paid time off.

To help our team members succeed in their roles and to ensure consistent operational execution, we emphasize continuous training and development opportunities, including providing innovative tools and materials for the operational training and development of team members.

Operations personnel complete our management training program and ongoing development programs, including multi-unit training, in which instruction is given on all aspects of our systems and operations.

To help our team members succeed in their roles and to ensure consistent operational execution, we offer continuous training and development opportunities, including providing innovative tools and materials for the operational training and development of team members.

Operations personnel complete our management training program and ongoing development programs, including multi-unit training, through which instruction is given on all aspects of our systems and operations.

In addition, to further support our team members’ development, we established our Dough & Degrees program, which allows our team members to earn a college degree for free or at a reduced tuition in partnership with Purdue University Global and the University of Maryland Global Campus, among others.

In 2022, we made enhancements to the program, including expanded educational offerings and less restrictive eligibility requirements.

Employees working at least ten hours per week can now obtain their High School Diplomas, learn English as a second language, and earn associate’s, bachelor’s and/or master’s degrees.

Employees working at least ten hours per week can obtain their High School Diplomas, learn English as a second language, and earn associate’s, bachelor’s and/or master’s degrees.

We also offer a tuition reimbursement program that provides another opportunity for our team members to advance their careers.

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One of our core values is People First.

As such, we are committed to providing competitive pay and benefits to attract and retain top talent, whether in our Domestic Company-owned stores, in our supply chain centers or in our corporate offices.

We pay competitive wages to our front line team members in our Domestic Company-owned stores.

As such, we are committed to providing competitive pay and benefits to attract and retain talent, whether in our Domestic Company-owned restaurants, in our supply chain centers or in our corporate offices.

We pay competitive wages to our front line team members in our Domestic Company-owned restaurants.

Papa John’s offers a comprehensive benefits package to eligible team members.

We also make available to our team members several benefits designed to promote an inclusive workplace like paid parental leave, adoption support, and health

plans that are available to dependents, spouses, and domestic partners.

We also make available to our team members several benefits designed to promote an inclusive workplace like paid parental leave, adoption support, and health plans that are available to dependents, spouses, and domestic partners.

We offer eligible team members a 401(k) plan, with a competitive Company matching component to encourage retirement savings.

Beyond basic insurance programs, Papa John’s offers wellness services to help team members manage and optimize their health.

Beyond basic insurance programs, Papa John’s offers wellness services to help team members manage and optimize their health and well-being.

These no-cost programs include smoking cessation, diabetes and hypertension management, weight management, and mental health support through Papa John’s employee assistance program for all part-time and full-time team members and their dependents.

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Our QC Centers and restaurant operations undergo annual safety audits, as well as random safety checks by regional safety managers and field safety coordinators.

We have also taken steps to mitigate the impact of the COVID-19 pandemic on our team members and our customers by implementing extra health and safety measures across our business, including No Contact Delivery and enhanced cleaning and sanitization measures.

Industry and Competition

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The QSR Pizza category is largely fragmented, and competitors include a few large national chains and many smaller regional chains, as well as a large number of local independent pizza operators, any of which can utilize a growing number of food delivery services.

Some of our competitors have been in existence for substantially longer periods than Papa John’s, have substantially greater resources than Papa John’s and can have higher levels of restaurant penetration and stronger, more developed brand awareness in markets where we compete.

awareness in markets where we compete.

Competition from delivery aggregators and other food delivery concepts also continues to increase.

Internationally, the pizza delivery model is not as mature as the Domestic market and presents a growth opportunity for Papa John’s.

For more information, see “Item 1A—Risk Factors—Industry and Macroeconomic Risks—Our profitability may suffer as a result of intense competition in the QSR Pizza industry.”

Internationally, the pizza delivery model is not as mature as that of the Domestic market and presents a growth opportunity for Papa John’s.

We believe demand from international consumers will continue to increase as the demand for pizza delivery and carryout continues.

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There is also active competition for management personnel, drivers and hourly team members, and attractive commercial real estate sites suitable for Papa John’s restaurants.

In the United States, our 11 QC Centers produce dough and distribute substantially all key ingredients, including mozzarella, dough and pizza sauce, and other supplies, including food products, paper products, smallwares and cleaning supplies to Domestic Company-owned restaurants and franchised restaurants to ensure consistent food quality.

Each Domestic franchisee is required to purchase pizza sauce and dough from our Domestic QC Centers, and purchases substantially all other food products from our QC Centers.

We also have one QC Center in Canada that produces and distributes fresh dough, which provides further support to our North American franchisees.

In our International segment, we operate one International QC Center in the UK and other International QC Centers are operated by franchisees pursuant to license agreements or by other third parties.

We depend on a sole source for our supply of garlic sauce and we source other key ingredients, including meat products, from a limited number of suppliers.

For a discussion of the related risks, see “Item 1A—Risk Factors—Company Risks—Increase in ingredient and other operating costs, including those caused by weather, climate change and food safety, could adversely affect our results of operations,” “—Our dependence on a sole supplier or a limited number of suppliers for some ingredients and other supplies could result in disruptions to our business,” and “—Changes in purchasing practices by our Domestic franchisees, or prolonged disruptions in our QC Center operations, could harm our commissary business.”

Government Regulation

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State laws often limit, among other things, the duration and scope of non-competition provisions and the ability of a franchisor to terminate or refuse to renew a franchise.

countries also have disclosure requirements and other laws regulating franchising and the franchisor-franchisee relationship.

Some foreign countries also have disclosure requirements and other laws regulating franchising and the franchisor-franchisee relationship.

National, state and local government regulations or initiatives, including health care legislation, “living wage,” or other current or proposed regulations, and increases in minimum wage rates affect Papa John’s as well as others within the restaurant industry.

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During 2023, we had no material environmental compliance-related capital expenditures, and no such material expenditures are anticipated in 2024.

Impact of COVID-19

Please refer to “Recent Business Matters” within “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of recent business developments, including the impact the COVID-19 pandemic is having on our business and results of operations and financial condition.

Additional Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business