"While we are committed to growing our base of company-owned restaurants where it makes strategic sense, this sale allows us to tighten our geographic focus of corporate operations while adding an excellent new franchisee to our system," said Papa John's COO, Bill Van Epps, in a statement. Although terms of the deal were not disclosed, the sale is expected to close at the end of the third quarter or beginning of the fourth quarter, and is not expected to have a "significant impact" on the company's 2005 operating results.

In its second quarter ended June 26, the third-largest pizza chain reported earnings per share of 64 cents as compared to a loss of 15 cents per share in 2004; a 6.1% increase in domestic system-wide sales for the quarter; and year-to-date cash flow from operations of $37.8 million vs. $6.1 million for the comparable period in 2004. The company also increased its 2005 EPS guidance to a range of $2.42 to $2.48. The company expects domestic comparable sales to increase 4% to 6% for the year, and domestic company-owned restaurant operating margins will approximate 19% to 21% for the full year.

As of July 24, 2005, Papa John's had 2,883 restaurants, of which 571 were company-owned and 2,312 franchised, operating in 49 states and 19 countries. Papa John's also franchises an additional 115 Perfect Pizza restaurants in the United Kingdom.