Okay. Hello. Good morning, everyone. Thanks for being here. My name is Brian Mullan. I'm the restaurant and food distribution analyst here at Piper Sandler. Very pleased to have Papa John's with me today on stage. I've got the CEO, Todd Penegor. We've also got a few other members of the team in the audience. Todd, thank you for being here. Our pleasure, Brian. I think maybe a place to start, on the most recent earnings call, one of the things you talked about was seeing an opportunity to strengthen Papa John's value perception. Maybe just to frame this all in a good place to start a discussion, maybe talk about what you think has been accomplished thus far on value throughout the transformation plan, and then from here, where do you still see opportunities to continue to improve Papa John's value perception moving forward, and how you're going to go about doing that? That's a great question. Papa John's has always been known for quality. We get a lot of credit for better ingredients, better pizza, and folks still say that to this day. They just really don't understand why we're truly better than the competitive set. When I first got here a couple of years ago, we got a little out of position on value. People saw us as more of the premium QSR pizza player. We made some moves. We had to go back to a barbell strategy and make sure that we had the news on the top end with some innovation and an appropriate price point for that innovation. We had to make sure the bottom end of the barbell was set well, and Papa Pairings became a prominent placement on our menu so we could play a good high-low. We had to build a strong loyalty program that had true value for our 43 million+ members, so we revamped the loyalty program to make sure there was true value there for the consumer, and started to make some real good progress. Our quality metrics, as we focused on being the best pizza makers in the business, continued to improve. Our value for the money had continued to improve, and we were making a lot of progress up through the second quarter of last year. In fact, the second quarter of last year, we were positive on sales and transactions in the first time in quite some time. Then the competitive landscape switched, right? Deep discounting, not just the major QSR pizza players, but across the broader QSR segment. We were fighting the battle truly on value from a national calendar perspective. Our national promotions drive 20%, 25% of our business. We are running the high low and the barbell from the national side of the equation. With co-ops being disbanded and local spending being discretionary, we weren't fighting the full barbell from both a national and a local level. What we ended up doing over the course of this year, and with added incent to reestablish some co-ops, we've now got 50% of our markets up with a co-op. They're contributing 2% local spend in those markets. We incented it with a 1% contribution to the co-op as a top-off. It really allows us to then have a coordinated message, not just in the DMA and in that co-op, but then how do you have a complementary message to what you're doing on the national calendar to make sure you're really telling the high-low story nationally and locally to optimize the P&L and the four-wall profitability. That's work that we still have in front of us to get more of the system set up in co-ops, and I'm sure we can talk about that here in a little bit. But those are things where we've made some nice progress. The ongoing journey is really how do we continue to elevate the quality of our food? How do we have the appropriate dough for the equipment that we have now in the restaurant? What do we need to do to make sure that we're delivering consistently with the quality that our consumer deserves every day, not just on the food, but through the whole digital experience? There's a lot of work underway to continue to elevate that experience to make sure it's not just about price. It's about worth what you pay. People want us and know us for quality, but we got to deliver quality at an affordable price, and that's where our system's really focused at the moment. Okay. Thank you. There was some news last week about a new partnership with Walmart Express Delivery. Maybe just share a bit about how that came together, how it will work, what you are hoping to see from that. We have talked a lot about what are the opportunities to really expand our TAM and think about where the total addressable market could go. We started with some early discussions with Walmart to figure out where does our footprint sit, where is their footprint? Is there some complementary opportunities where a brand with our quality halo could really help with their Walmart Express consumer. We had a lot of work to do from a technology perspective, and ultimately, we have now become their first off-premise restaurant brand. We are going to participate with them in the Walmart Express program. If you think you want a home-prepared meal from Walmart, and you also want to pick up some other home essentials, but you want a pizza delivered, they will be that fulfillment arm for us to make sure that they can deliver that pizza to you at good economics. Their everyday low pricing, they are trying to make sure that they have got pricing that the consumer can achieve in that channel that would be similar to buying it from the restaurant, so effectively without the markups. We think we are a really good partner to do that. We got a lot of pilots with them in the back half of this year, so we will really start to see the significant impact of bringing in and connecting to customers that might not otherwise have connected to our brand through that channel into next year. We think it would be a nice tailwind to our business. Okay. Very good. Just a question on operations. On the last earnings call, you talked about seeing a 400 basis point gap between the top and bottom quintile operators. I think you talked about building a brand standards coaching team, which I had not heard you discuss that before. Just give us a little history and context. Is that gap wider than it used to be, or maybe is that an unusually wide gap? Talk about the strategy at corporate right now in terms of helping the franchise system get better at operations. Yeah. The gap has been widening, and any brand is only as good as the lowest common denominator. What we really need to do is raise the floor, because inconsistency is the Achilles heel for the quality promise that any brand makes day in and day out. What we had to do is make sure that we had more touch points with our restaurants. As Marc Richard came into the organization, we reorganized our field team in a regional support manner so we could get more touch points into each of the individual restaurants. He brought in some really talented senior directors to partner with our DVPs in each of the regions. Then we really brought in some pizza experts to be the brand standard coaches. They not only do the restaurant evaluations, but they're spending some really quality time in the restaurants, side by side, helping training, helping coaching, make sure that we're creating a great experience. We really saw that we needed that role to help us as we started to innovate a lot more at the beginning of this year. We hadn't had innovation in quite some time. Our innovation calendar was relatively bare, and as we started to introduce new products like the pan pizza or sandwiches or even Toy Story, we started to realize that we did need some really good coaching out in the field. We did a lot of mystery shops. We've done a lot of evaluations. We did get a real push from our franchise community, help us help ourselves get better and help us raise that floor, because we do know that when folks say, "Hey, I'd love to go to that Papa John's," that means there's another one in town that they're going to stay away from, and that just can't be, because we all get lumped into that overall service experience. The team's been doing a nice job. A lot of work still to do to raise that floor. But it's a big opportunity with that 400 basis point comp gap between the bottom quintile and the top quintile. I think we're making progress, and we'll continue to work that over the upcoming months and quarters. Okay. A question on marketing. As of last month, you've got a new Global Chief Marketing Officer. What would you say his most pressing or important priorities are over the near to medium term as he steps into that role? Then in terms of what we might see on the outside or what the consumer might see, what can be done quickly versus what might take a little bit more time to show up? Yeah. Chris Lyn-Sue was my interim Chief Marketing Officer when I first joined, but I wanted to keep him really focused on the international transformation, and he's done a great job. We've got a lot of momentum in our international business across the globe right now. As I had to make the change in that role to really make sure we connected to the hearts and minds of the franchise community, bringing over a proven not just marketer, but commercial marketer to partner with the franchise community to get them all on the same page around how do we need to get back to a real traditional barbell, good value on our everyday offerings on the top end, pulse in some good promotions on the bottom end, really work with our field marketing team that's been established to be at the table with the co-ops that have been set up. Ensure that we not only tell our story around why we're truly better, make sure folks understand six simple ingredients, folks understand fresh, never frozen, North American original dough, the simplicity of our crust, as you think about why our pizza was designed with those simple ingredients and the simple view. It's a nice outside breadstick that was made for dipping into that signature garlic sauce. How do we actually tell the story around all of that, and glamorize the food? Make sure the role of innovation isn't about just trying to bring in lapse to new, which is really challenging in this market, but how does it elevate what the brand stands for from a quality and start to see something that you wouldn't get from a traditional big box pizza player, and you've seen that with some of the work that he's done in the international market with croissant pizzas and sourdough pizzas, and done it in a non-operationally complex way. Then really go tell our story around why we are great value for the money, in partnership with the operating team to make sure we deliver on that promise day in and day out. He's hit the ground running. You're seeing us play that playbook right now. We're pulsing in some value with a 50% carryout offer that ran a few weeks back. We've got a BOGO that's going out there right now, a $12.99 ultimate pepperoni pizza. We do think we got a good barbell set at the national level. We're really trying to make sure that it's then complemented, as I said earlier, at the local level. That's the work to make sure that coordination is truly there to optimize the four-wall economic model for our franchisees and to connect to the communities that we serve. Okay. Thank you. To close the loop on the local, the co-ops, and on an earlier answer, it is important. I think, is it 50% of stores it is at, or is it half the markets? Where are you with, you want to get them everywhere, so where are you with that? Yeah. We want to get them everywhere. Back in 2023, there was a retrade with the system. Part of the retrade was going to 6% national, so moved up from 5% in the ad fund contribution. At the time, we were either 2% or 3% local, and that 2% or 3% local was made optional at that stage. The trade that was made for that was we were going to increase the commissary margin from 4% to 8% over four years. When you think about what it truly takes to play the game nationally, but to execute and compete locally, you need to have those co-ops up and running. We have had to incentive. We have talked about some of the investments that we have made off of our P&L to really get folks engaged to set up 50% of our restaurants with a co-op. We had to go out and say, "Hey, if you can reestablish the co-op and you spend 2% locally, we will top it off with another 1%." We have done that in those markets. We are seeing a 200 basis point delta between the performance on sales in those markets versus the folks that do not have a funded up co-op at this stage. We do think that is a big opportunity to get the system back to where we were prior to 2023 with 80%, 90% of our system involved in a co-op to compete at the local level, because it is very fragmented out there. You can go into a market today, you might have one franchisee with one message on one side of town, another franchisee spending the money differently on another side of town, and a bunch in between just drafting off of one another. In today's environment, to connect to your local communities, to really go out and fight up and down the street to drive those sales, you need a unified message that you can galvanize behind. That is the opportunity ahead, and we are trying to get that re-traded and negotiated with the franchise community and urgency by the end of this year so we can get the preponderance of the system set up with co-ops next year. We will figure out what the right level of national and local is, but it is probably not too far off of where it would have been if you go back to 2023, which is where we had been for the history of the brand until that change was made at the end of that calendar year. Okay. That's helpful to understand. Just thinking, you kicking in to top off local is one form of investment. But broadly, the investments Papa John's as a franchisor is making in terms of supporting the transformation plan. One, it sounds like from the most recent earnings call, you're committed to extending some kind of support into fiscal 2027. If you could confirm that was my understanding. Then two, one question I think investors are wondering if is there something a little more sizable or a little more longer in duration might be in the cards, just to make sure that the transformation plan can fully succeed given how kind of tough the operating environment is? Yeah. So, what we guided for this year is we're going to spend $35 million off of our P&L. So that's built into the guidance of $180 million- $190 million adjusted EBITDA for this calendar year. We've been spending the money topping off the ad fund. We've been funding margin for the franchise community to go out and compete on value. We use some of the dollars to incent setting up some of the co-ops. But importantly, we've been really working to make sure that we can continue to drive 3P national level as we try to figure out how that evolves from both a national and a local level. We're continuing to invest back into technology on behalf of the system. So we're going to continue to drive those this year to finish the year strong. As we go into next year, we did say that we're going to spend up to a similar amount next year. So, up to $35 million is built into, we haven't provided long-term guidance, but built into expectations for next year. What we're really doing is part of this overall re-trade with the franchisees to get the local and national appropriately set and get the co-op set up. We're really sitting with them to think about where do those dollars need to work the hardest, to make sure that we're a unified system when we put the dollars to work to go execute as one team, to make sure that we're driving our business forward in a manner that works the best for the entire system. So, how those dollars get put to work, whether it's continue to do things like we've done this year to incent a play to win incentive, which is to raise the bar on operational excellence. That could be one way. You could continue to fund some margins on promotions or top up the ad fund, or you continue to invest back into some of the supply chain margin to make sure they got the fuel to compete. Those are all things that are being discussed at the moment, and we'll provide more clarity on that as we get the re-trade done with the system and really establish guidance for 2027. How it looks into 2028, we'll have to see. Like, if we're going to co-invest, if we're going to go invest to grow off of our P&L with a commitment for the system to go invest to grow as they start to set these local co-ops back up. Hopefully, that starts to turn the business, drive the business moving forward, and we can start to see that spending stair-step down beyond 2027. Okay. Thank you. You did touch on some of the recent menu innovation that's taken place at the business. Just as you sit here today, as you look at the menu, the total offering compared to some of the larger peers, where are the biggest areas of opportunity to improve over the next three to five years? I think maybe part of it is the pricing construct, and value is important. We talked about that. I am curious if there's any product gaps that you see or that you think the team would be able to address. Yeah. I think we've addressed some of the product gaps this year. Clearly not playing in pan was an opportunity, so we launched pan earlier this year. With an expectation that would bring in more laps to do. It didn't do as much of that work as we thought. It really helped drive a good mix profile and frequency with our existing customer. We had to introduce sandwiches. We needed a good handheld offering, and we thought sandwiches was that play, and still believe in it. That was really a replacement for Papadias. Papadias was super operationally complex in the way the dough balls had to be managed and how we had to do it in the restaurant. So it was a nice trade to take operational complexity out, still have a handheld. We brought some news with Toy Story, which did really well internationally. We had some collectibles that went along with that pizza offering on the international front. We didn't do that in the U.S. market. I do think we've got a lot of our menu covered. We still have to continue to bring in some affordable sides, which we've been doing. We've got a good cheesy bread offering using the ciabatta bread from the sandwiches in the restaurant today. As you think about desserts, you think about what is it going to really take in this market to build some check, drive attachment with the existing customer. I think we've got some opportunities to innovate there. I think our real biggest opportunity, though, is really to focus on the core. What do we need to do to renovate our core? We made a lot of operational changes through COVID. We were always hand-slapped in every single restaurant. We put spinners in to simplify the operation, to flatten out the dough balls. A good operator still has to slap that and make sure you got a good edge lock to have that great cheesy breadstick that we have at the end. There's some things that we need to do to evolve some of the equipment in the restaurant. Simple things like an insert, potentially, in the spinner to help get that good edge lock. Some more training with our brand standard coach to make sure it's slapped out, to deliver that promise that we want day in and day out. There could be some work, not that we'd change our dough, but to optimize our dough so it works really well on a spinner, because it was really designed to be hand-slapped. In the U.S. market, we're really a spinner-driven organization. We're going to have to look at the quality of all of our ingredients. Lots of little things have changed for all the right reasons over many years, and we're going to go back and look at everything. The sweetness of our dough, or sweetness of our sauce, and how our sauce is actually being developed and delivered. What do we need to do with our cheese and the cheese melt? What do we need to do with the toppings? How do we showcase those toppings to make sure we get full credit for all of those quality toppings that we put into the restaurant? Those are things that are underway, going to take a little bit of time. Renovating the core to get the crave back, to make sure that we can connect to the hearts and minds of not just the folks that have stuck with us, but those folks that have been lapsed, is a big opportunity ahead for us to compete even better and truly be a cut above the big box QSR pizza players. You'll see us do some things that'll be a little more artisan akin on the pizza play. May not drive a lot of sales, but really will provide that real quality differentiation halo, and that's some of the work that Chris Lyn-Sue and team have underway right now. Okay, good to hear. Just want to ask some of the different sales channels. I'll just start with the 3P aggregators. I think on the most recent earnings call, you referenced the 3P channels getting more crowded. You were seeking to make some adjustments. Just give us a little more perspective here on what you've observed in that channel and the tweaks you're making and what your objectives are. Well, first was one of the announcements. We're going to create a little more competition in the 3P channel with Walmart Direct coming in, which is a good thing. We'll continue to partner with all the 3P providers. I think what our biggest opportunity is we've played as a first mover for pizza into 3P. We've played the game with more BOGO discounting, which has kind of been where pizza players have gone. It's kind of one size fits all. What we're really trying to do is, where do you need to promote on the 3P channel? Not just days of the week, but across day parts. How do you do it nationally? Where do you actually have to have some local and regional differences? We've got a lot of good learnings from all the data that we have, and really getting the co-op set back up, have a unified voice, national, local. When do you actually go with national promotions on 3P? When does it have to be a little more regionalized and locally driven? Those are all opportunities to make those dollars work a heck of a lot harder, and we're making some of those adjustments year to go, and you'll see a lot more of those adjustments coming into next year. Okay. Then on carryout, it's a big business. I think it's almost 50% of sales, if I'm not mistaken. What are the teams focused on to drive carryout from here? Excuse me. In the past, you've discussed maybe a remodel program needed at some point. I know it's probably not imminent, but at some point, which could help with carryout. Just update us there on the remodel and then broadly the carryout strategy. Yeah. We're about 50% of orders, so when you get to the 50%, it's of orders about 40% of our sales on the carryout front. It is a high overall satisfaction on delivery or pickup channel for us. You get to have that human interaction when you're picking up your pizza at a really affordable price point. People do shop with their eyes, right? If you're known as a quality brand, you want to have an asset that appropriately looks the way it should for the quality of the food that you're delivering. We're about 25% of our system is at an image that's been updated. Probably a little behind where the competition is. For a 40-year-old brand, there's an opportunity to refresh the front and the back of the house. We're just going to have to be smart to make sure that the level of investment that it takes, we're going to actually get a good return for it. We've been doing some partnerships, testing and incentives with various franchisees to start build the business case. We've been doing that in the company restaurants. We're just trying to make sure as we think about where we need to prioritize investments. As you think about, is it new build? Is it a reimage? Is it investing in technology? Is it investing into your team? Or is it investing to compete at the local level? Where do we prioritize and sequence those investments with the franchise community, really working with joint capital plans to make sure it works for them and works for us. You will see us continue to have an appropriate level of incentives to try to get reimaging done, because we've seen that it can have an impact in the local company markets and a couple franchise markets that have done it to date. Okay, thank you. Wanted to ask about some of the domestic re-franchising activity. Recently completed a 28-unit transaction with what seems like a great franchisee down in the Central Florida area. Are there more transactions that you're currently evaluating? Is getting down to the 5% mix for company-owned stores, is that still something you're trying to do? Any timeline you are thinking about internally to get to that? Yeah, the goal in North America is to get down to mid-single-digit company ownership. Probably get there during the course of 2028, to put a stake in the ground. We've got a handful of markets that are in the queue. We'll pace and sequence them to make sure they transition to the right operator, and the handoffs work well over the course of early next year and into 2028. We've re-franchised three different markets to date so far between Orlando, we did a little bit of work up in Milwaukee, and then across the Mid-Atlantic states so far as we worked ourselves down. We'll continue that journey. We've got some really strong operators. Wade Oney, who had picked up those restaurants in Orlando, has been a long-term great operator that is a good partner of the brand. We've got a lot of folks that have earned the right to grow, and we'll make sure for them that we get these restaurants into their hands and let them really connect to the local communities in even a bigger way than we might be doing today to continue to drive their business moving forward. It is part of the growth algorithm, and continue to drive great service experience and connect to the communities we serve. It is an important part of the growth going forward for us. Okay. Well, Todd, thank you. I think we are actually coming up on time. I don't know if there's anything you'd like to leave the investment community with on Papa John's? No, just thanks for sticking with the story. I mean, the transformation has taken a little bit longer than we would've thought. Clearly, the consumer competitive landscape has made it a little bit more difficult. Our brand is founded on quality. When you think about value for the money, it's always going to start with quality at the core, quality with the innovation. But we're going to have to be smart. How do we promote? When do we pulse in some promotions? How do we make it work for the restaurant economic model? And how do we do it from both a national and a local perspective so it truly complements one another when we're making those dollars be spent to drive the restaurant economic model? That's the fuel and the gift that'll keep giving. Get the floor wall working, everything else takes care of itself. Okay, very good. Thank you very much. Appreciate it. Thank you.