LOUISVILLE, KY- Papa John’s International Inc. is continuing to expand its operations outside of the United States. So far this year, the pizza company has nearly doubled the number of countries with a Papa John’s presence and now has more than 600 international restaurants slated to open over the next seven years.

Papa John’s is moving forward with its international expansion despite the fact that it has had two corporate downsizings over the past two months and poor earnings. Net income for the first nine months of2004 was down 45% to $13.6 million compared to $25.3 million for the same period last year.

Nonetheless, Papa John’s executive team is confident that international expansion will benefit the company as it celebrates its 20th anniversary this year. It is pursuing additional franchisees for new and existing international markets, says a Papa John’s analyst who wished to remain anonymous.

“Opening international stores is as good a way to grow as any, I guess,” the analyst says. “There is less competition in the international markets than there is in the U.S.”

However, another analyst who also did not want to be named, is not completely sold on the company’s future international successes. “Finding the right franchisees internationally can be a real challenges, and I am not sure that Papa John’s can differentiate between other pizza companies and build brand awareness,” he says.

Currently, Papa John’s has 2,808 restaurants (567 company-owned and 2,241 franchised) operating in 49 states and 18 international markets including its recent expansion into Trinidad, Peru, Bahrain and Oman.

Through the third quarter of 2004, Papa John’s opened 47 new international locations: four in Shanghai, China; six in Mexico; one in Trinidad; 10 in Seoul, South Korea; two in Athens, Greece; two in Canada; nine in the United Kingdom; one in Lima, Peru; two inMoscow, Russia; one in Caguas, Puerto Rico; two in Riyadh, Saudi Arabia; one in Nassau, Bahamas; four in Bahrain; one in Oman; and one in Caracas, Venezuela.

Looking forward, Papa John’s plans to accelerate its expansion in China’s coastal region next year, the analyst says. The company, which opened its first Chinese location in Shanghai last October, plans to open 200 stores in the country over the next 10 years. One analyst points out that Papa John’s will likely see the benefits as China becomes more of an American tourist destination. Currently, Dallas-based Pizza Hut Inc. is the largest pizza chain in China.

Papa John’s was not available for comment for this story.

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