'Majority of our supply chain comes within Canada and won't be exposed to tariffs': Boston Pizza CEO

Boston Pizza Q4 2025 Earnings & 2026 Outlook

Key Concepts:

• Franchise Model: Boston Pizza operates primarily through a franchise system, generating revenue through royalties on food sales.
• Royalty Income: A percentage of food sales paid by franchisees to the parent company (Boston Pizza).
• Off-Premise Growth: Increase in sales through takeout and delivery channels.
• Macroeconomic Headwinds: External economic factors (inflation, interest rates, etc.) that can negatively impact consumer spending.
• Income Fund: A publicly traded entity (on the TSX) that distributes royalty income to investors.
• Same-Restaurant Sales: A key performance indicator measuring sales growth at locations open for at least a year.

I. Financial Performance – 2025 & Q4 Results

Boston Pizza reported record sales for 2025, with record performance extending across all four quarters. Same-restaurant sales increased by nearly 5% year-over-year. This success is attributed to strategic promotions and significant growth in off-premise channels (takeout and delivery). Total revenue for the last quarter was also a record. Profitability was bolstered by royalty and distribution income. Specifically, the company collects a 7% royalty on food sales (excluding alcohol, a historical exception dating back to the company’s 1964 Alberta franchise beginnings). 5.5% of this 7% royalty flows to the Boston Pizza Income Fund, which has been publicly traded on the Toronto Stock Exchange (TSX) since 2002, providing stable and growing distributions, including a special distribution in December. Monthly distributions are made to investors.

II. Consumer Spending & Macroeconomic Context

Despite acknowledging consumer caution and tighter household spending due to the broader macroeconomic environment, Boston Pizza experienced continued growth in both visitor numbers and sales. Jordan Holm, President of Boston Pizza, emphasized that the perceived value of dining at Boston Pizza – whether in-restaurant, at sports bars/patios, or via takeout/delivery – remains strong, driving consumer choice even amidst economic uncertainty. He stated, “we continue to see more visitors and more sales at our Boston Pizza restaurants across the country.”

III. Impact of Sporting Events

Boston Pizza benefits significantly from major sporting events. The Toronto Blue Jays’ playoff run in 2025 was described as “fantastic,” with restaurants serving as popular destinations for fans, even during the seven-game series. The upcoming Winter Olympics and the FIFA World Cup (hosted in North America, including Canada) are anticipated to further boost traffic. Holm noted that while the Winter Olympics present a different viewing dynamic due to time zones, events like hockey are particularly conducive to group gatherings. He highlighted Boston Pizza’s position as a prime viewing location, stating, “the best place outside the arena or the stadium is Boston Pizza to watch the game.”

IV. Expansion & Future Outlook – 2026

Boston Pizza currently operates 372 locations across all ten Canadian provinces and two of three territories. While no new locations were opened in 2025 (and no closures occurred), the company has projects underway for 2026. The company identifies numerous “underserviced markets” across Canada, demonstrating versatility in serving both small towns and urban centers. Real estate and franchising teams are actively working on developing new restaurants.

V. Potential Risks & Headwinds

The restaurant industry is inherently competitive. Boston Pizza mitigates this through continuous menu evolution, promotional strategies, and adaptation to modern dining trends. A potential headwind identified is the threat of tariffs. While the majority of Boston Pizza’s supply chain is sourced domestically, shielding it from direct foreign exchange and tariff impacts, the company acknowledges the potential for tariffs to influence consumer sentiment, employment levels, and overall spending. Holm stated the company is “keeping an eye on that as a potential headwind.” However, the recent financial results demonstrate confidence in the company’s ability to maintain its position as a desirable destination for Canadian diners.

VI. Family Focus & Brand Positioning

Boston Pizza actively caters to families, offering a dedicated kids’ program and kids’ meals. This focus on family occasions is a significant driver of business. The brand is positioned as a versatile option for both casual dining and special events.

VII. Geographic Focus & History

Boston Pizza is a proudly Canadian company, founded in Edmonton, Alberta in 1964. This Canadian origin is a key aspect of its brand identity and supply chain resilience.

Conclusion:

Boston Pizza demonstrated strong financial performance in 2025, driven by successful promotions, off-premise growth, and a resilient brand that continues to attract customers despite macroeconomic challenges. The company is strategically positioned to capitalize on upcoming sporting events and is actively pursuing expansion opportunities while remaining mindful of potential economic headwinds. The franchise model, coupled with a consistent focus on value and customer experience, appears to be a key driver of its continued success.