Vancouver-based pizza company Papa Murphy’s will cut eleven management positions to save about $1.5 million per year.
Among those leaving are members of its board of directors, Jayson Tipp and Brandon Solano, the chief development officer and chief marketing officer, respectively. The company will pay up to $1 million total in severance and other “one-time termination benefits,” it said.
The announcement was made last week in a filing with the Securities and Exchange Commission, the federal regulatory agency for publicly traded companies.
“While it’s always a difficult decision to affect people, this realignment is necessary to ensure the business is as efficient as possible while we remain laser-focused on the support of our franchise owners and field staff as we all execute on our key strategies,” Jean Birch, interim CEO and board chair, said in a statement.
“Every dollar we spend is important,” said Christine Beggan, a spokesperson. “In addition to reducing costs and thus improving the overall profitability of the company, this realignment of resources is aimed primarily at improving the Company’s effectiveness as we focus on driving franchise growth.”
Tipp declined to comment for this article. Solano said he will continue to be a shareholder and wishes them “nothing but the best going forward.”
The cuts follow a tumultuous stretch for the take-and-bake pizza purveyor, whose revenues have struggled and whose executives have been replaced. Sales dropped an estimated 5.2 percent last year, and share prices of Papa Murphy’s Holdings Inc., traded on the Nasdaq as FRSH, dropped from $12.81 in May to $4.17 Tuesday.
Chairman John Barr resigned in September, followed by Chief Executive Officer Ken Calwell in December. Birch, a board member since April 2015, has taken over as board chair and currently serves as interim CEO.
The company appears to be in the midst of a shake-up. It recently hired a consulting firm to help sell off company-owned franchises, which representatives said was always part of the long-term plan. Refranchising would enable the company to move from pizza sales revenues to earning royalties, licensing fees and property rentals from franchisees.
The most recent SEC filings say Papa Murphy’s is looking to partner with “high-quality, well-capitalized franchisees who can buy” stores and build up certain markets.
Still, the company hopes to drive sales upward with a recently debuted national television ad campaign — its first — and a new online ordering platform.
“We see significant long-term opportunity for profitable growth at Papa Murphy’s,” Birch said in the statement. “We are confident that we now have the right structure, team and strategies in place to enable us to drive our brand forward and create long-term value for all shareholders.”
Papa Murphy’s was founded in 1981 and has more than 1,570 franchised or company-owned stores in the United States, Canada and the United Arab Emirates.
Shares of Papa Murphy’s Holdings Inc. closed Tuesday up 2 cents.