Papa John’s announced it would refranchise its majority stake in a 90-location group of restaurants in the Dallas area.
The company, known as Blue and Silver Ventures, was a joint venture between Papa John’s and Dallas Cowboys owner Jerry Jones. The company had been shopping around for a M&A transaction for a couple years, but Sun Holdings emerged as a fast-growing franchisee that made a lot sense to both Blue and Silver and Papa John’s.
“Sun Holdings is a proven, well-capitalized operator who understands our ambitious goals to expand the footprint of our brand,” said Amanda Clark, Papa John’s Chief Development Officer. “We will continue to build new corporate restaurants as well as refranchise when we can provide our franchisees strategic scale to support the brand’s long-term growth, with this deal as a great example.”
The deal “took a long time to happen” according to Sun Holdings CEO Guillermo Perales, but he said he was willing to take on the complexities of the deal to grab a large swath of the Texas market.
“Now that everything is done, we’re both real happy. I think there is room to build new stores in Dallas and Austin,” said Perales. “With more white space the easier it’s going to be for us to develop.”
Since he signed on with the Papa John’s brand, Perales has been aggressively growing the number of locations, mostly buying, but also building rapidly. This and other acquisitions helps him lock down that white space so he can develop in the ideal areas without a lot of potential slowdowns.
“In Texas, you have so many franchisees you get stuck by the right of first refusal, but when you have the market, you can decide wherever you want to go,” said Perales.
For him, it’s great growth and for his Papa John’s brand leader Steve McNeil, it’s a bit of a homecoming. He was a part of the venture while he was working at the Papa John’s corporate entity and oversaw its growth from 27 to 90 locations.
He’s eager to build out the trade area more, and “color outside the lines” and make some key changes he wanted to do back in his corporate days.
“I say this all the time to anyone that listens, I think Papa John’s International does 10 things really, really well,” said McNeil. “On the franchisee side, I can say they do 10 different things really well. I look at this as a way to meld the best of both worlds.”
The deal has been done since September of 2021, when McNeil started, but Papa John’s just announced it. It comes on the heels of the company’s largest franchisee development agreement in history, which also happens to be with Sun Holdings. Perales said he’s quite eager to grow the brand, as is plainly obvious from the 100-unit development deal, and the numerous acquisitions. With this latest deal on record, Sun Holdings has 166 locations in all.
“We want to be Papa John’s to be one of our major brands, I really like the unit economics and what the brand has done to position itself against the other brands. I think with that we should be able to be the largest franchisee in the brand,” said Perales.
Sun Holdings has about 1,400 locations in all with Burger King, Popeyes, Arby’s, Applebee’s, T-Mobile, McAlister’s, IHOP and GNC. The company is also the franchisor of Taco Bueno.