The owner of Papa Murphy’s, Cold Stone Creamery, Pinkberry and dozens of other chains has temporarily closed 2,100 of its locations due to the coronavirus and on Monday said it had temporarily laid off more than half of its global workforce.
The closures, featuring large numbers of the chain’s mall-based locations and brands not otherwise considered essential businesses, represent 28% of the 7,300 locations that MTY and its franchisees operate in the U.S. and Canada.
MTY came out quickly in mid-March offering to postpone its collection of royalties for four weeks. Its efforts have evolved since, like much of the restaurant business. Two weeks ago the company closed offices across Canada.
On Monday, however, the company acknowledged broader challenges. It addition to the layoffs, the company said it had reduced capital and operational spending “to a minimum” and cut the base salaries of its leadership team. MTY also suspended its quarterly dividend.
“We expect this matter to materially impact the company’s results for at least our second and third quarters of 2020,” MTY said, adding that it could not “reasonably” estimate that impact.
It added that the severity of the impacts will depend on the duration of the disruption and help from governments, financial institutions, landlords and business partners.
MTY operates mostly small, mall-based chains in the U.S. and Canada. Papa Murphy’s, the take-and-bake pizza chain based in Vancouver, Wash., is its largest individual concept. MTY said most of its company-operated restaurants are closed, except for its Papa Murphy’s locations.
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