MTY Food Group will close 68 underperforming corporate-owned restaurants over the next six to nine months following a portfolio review, with the closures expected to cost between $10 million and $12 million and affect locations that collectively lost more than $10 million over the past year, the company said Friday.

Eric Lefebvre, MTY’s president and CEO, said the closures will involve 45-50 Papa Murphy’s locations, along with outlets bearing other banners.

The Montreal-based restaurant franchisor said the closures are intended to improve the quality and profitability of its corporate store portfolio by allowing management to focus on stronger-performing locations. The company recorded a $7.5-million impairment charge on right-of-use assets in the second quarter related to the planned closures.

MTY’s restaurant network grew by a net six locations during the 13-week period ended May 31 after opening 84 restaurants and closing 78. The company operated 7,040 locations at quarter-end, including 6,808 franchised or operator-managed restaurants and 232 corporate-owned locations.

The company said it expects the pace of restaurant openings to improve in the coming quarters and remains confident it will achieve net location growth despite reducing the number of less profitable corporate stores.

Pictured: Papa Murphy’s location in Springfield, Ill.

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