papa john's franchise business plan

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Papa John’s Franchise Costs $110K – $989K (+ 2024 Profits)

Here’s what you need to know if you’re interested in opening a Papa John’s franchise.

December 25, 2022

KEY FRANCHISEE INFORMATION

Here are the most important stats to know for franchisees.

NUMBER OF LOCATIONS

INITIAL INVESTMENT

$110,000 – $989,000

ROYALTY FEE

REVENUE PER YEAR

Papa John’s , one of the largest pizza delivery chains globally, was founded in 1984 by “Papa” John Schnatter in the broom closet of his father’s tavern in Jeffersonville, Indiana. From these humble beginnings, the brand has grown exponentially, with its headquarters now based in Louisville, Kentucky.

Papa John’s began franchising in 1985, just a year after opening its doors, which kickstarted its rapid expansion both nationally and internationally.

Papa John’s stands out in the competitive pizza market with its commitment to “Better Ingredients, Better Pizza.” This philosophy has resonated well with customers, underpinning the brand’s emphasis on quality. The company prides itself on using superior-quality ingredients, which has helped it carve out a significant niche in the pizza industry.

Number of locations

Here’s how many Papa John’s there are in the US today.

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Papa John’s

Initial investment

Here’s what you can expect to spend to start a Papa John’s franchise.

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document ). For a complete overview of all the expenses involved with the various formats offered by the franchisor , please consult the Franchise Disclosure Document.

Franchise fees & Royalties

Here are the main ongoing fees the franchisor will ask you to pay going forward to run the franchise.

Initial Franchise Fee

The Initial Franchise Fee is $25,000, which is fully earned and non-refundable upon the execution of the Agreement.

Royalty Fee

The continuing royalty is 5% of Net Sales, payable monthly.

Marketing/Advertising Fee

The Marketing/Advertising Fee for Papa John’s is set at 6% of Net Sales, beginning April 1, 2024, and continuing until December 30, 2029, unless the initiative is repealed or changed earlier by a vote of the members of the Marketing Fund.

Technology Fee

The Digital Fee is 1.5% of Net Sales via digital/Internet online ordering, including aggregator orders, payable monthly.

Transfer Fees

The Transfer Fee is $4,000 , or if the transfer involves multiple restaurants to more than one unaffiliated transferee, it is $4,000 per transferee. If transferring multiple restaurants to more than one affiliated transferee, the total fee is $8,000.

Renewal Fees

The Renewal Fee is $4,000, and $1,000 for non-traditional restaurants, due upon signing the renewal franchise agreement.

Revenue & Profits

Here’s how much revenue and profits you can make with a Papa John’s franchise.

Franchise pros and cons

Proven business strategy: The Papa John’s franchise has been successful and strong for over 35 years. And it has stayed true to its culture of using the finest ingredients to produce well-crusted, original pizzas that thrust them into the limelight. As a new franchisee, you are guaranteed a business model that works for your business and success.
Quality products: Papa John’s is well known for its emphasis on the quality of its pizzas. It has been ranked among the top national pizza restaurants for high-quality products and customer satisfaction. This helps it stand out from the competition, and customers will identify with new franchisees who want to enjoy this quality, crispy pizza.
Global presence: Papa John’s has a presence in more than 45 countries globally . The brand is highly recognizable, and new franchisees can easily market their businesses to a wider market.
Franchise assistance: The franchisor may offer franchisees applying for multiple units the opportunity to acquire restaurant equipment on a 48-month lease. This is done by signing a development franchising agreement with its affiliate, PJUSA. The lease takes a huge financial burden off the shoulders of new franchisees.
Strong brand: Papa John’s brand has had steady growth and keeps growing. Having more than 5,000 restaurants means the brand has great potential for new franchises to thrive. New franchisees are assured of a reliable franchise partner trusted by customers and investors.
Solid training and support: Papa John’s offers new franchisees extensive training and franchise support. They have a detailed six-to-eight-week managerial and profit-enhancing program. Franchisees, especially those without prior experience, also get access to a pool of resources, such as franchise businesses and specialists, to give them insightful ideas on how to succeed.
Passive investment: A Papa John’s franchise can be a good option for an investor looking for a passive investment. It allows franchisees to be absent from the management of their businesses. As a new franchisee, you can appoint a designated franchise manager as you pursue other interests.
Competition: The pizza industry is growing very fast. As a result, Papa John’s has faced stiff competition from major brands such as Pizza Hut. As a franchisee, you may not make huge profits.
Negative reputation: Although Papa John’s is a popular and big brand, its reputation was negatively impacted by the remarks of its former CEO, John Schnatter in 2018 – 2019 . His remarks were a challenge for new franchisees, forcing them to employ extra marketing efforts to restore their image and maintain their stability and growth.
Financing challenges: The franchisor does not offer financial assistance to its franchisees. It also does not guarantee any franchisee’s note, lease, or obligation.
Expensive marketing strategy : The parent company enforces mandatory marketing for new franchisees. This means they can’t source cheaper local marketing talent in their territories. Therefore, franchises must adopt the marketing strategy of the parent company, which affects their profitability.

How to open a papa john’s franchise

Opening a Papa John’s franchise involves several steps, designed to ensure you are a good fit for the franchise. Here are the main steps to follow to open a Papa John’s franchise.

1: Evaluate Your Qualifications

Financial Requirements: Ensure you meet the financial requirements for initial investment, including liquid assets and net worth.
Experience: Experience in restaurant management or ownership is preferred but not mandatory.

2: Submit a Franchise Inquiry

Initial Inquiry: Contact Papa John’s through their franchise development website to express interest and request detailed franchising information.
Receive Franchise Information: Review the franchising details provided by Papa John’s, including the investment breakdown, potential locations, and support structure.

3: Complete the Application Process

Application Form: Fill out the franchise application form, providing personal and financial details as required.
Background Check : Undergo a background check as part of the pre-qualification process.

4: Review Franchise Disclosure Document (FDD)

Obtain FDD: Carefully review the Franchise Disclosure Document which outlines the roles, responsibilities, and legal obligations of a franchisee.
Legal and Financial Consultation: It’s advisable to consult with a lawyer and a financial advisor to understand the implications of the FDD.

5: Attend Discovery Day

Visit Headquarters: Attend a Discovery Day at Papa John’s headquarters to gain a deeper understanding of the operational aspects and corporate culture.
Meet Key Personnel: Interact with key Papa John’s personnel to discuss potential challenges and strategies for success.

6: Secure Financing

Financing Options: Explore financing options if necessary, which may include loans, partnerships, or other financial instruments.
Approval of Financing: Ensure your financing plan meets the requirements and is in place to cover the initial investment and start-up costs.

7: Sign the Franchise Agreement

Agreement Review: Review and sign the franchise agreement, which legally formalizes your commitment and investment with Papa John’s.
Franchise Fee: Pay the initial franchise fee to confirm your territory and begin the establishment process.

8: Training and Site Selection

Comprehensive Training: Undergo comprehensive training covering all aspects of Papa John’s operations, from food preparation to staff management and customer service.
Select a Location: Choose a location approved by Papa John’s that meets the company’s demographic and logistical criteria for success.

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.

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Papa John's Franchise

Papa John’s Pizza is the third largest pizza delivery and take-out chain in the U.S. The company’s slogan (“Better Ingredients, Better Pizza. Papa John’s.”) emphasizes the brand’s differentiation through high quality ingredients, a positioning that won Papa John's the top product quality and customer satisfaction ranking among all national pizza chains in the American Customer Satisfaction Index. There are more than 5,000 Papa John’s locations across over 45 countries and territories. Papa John’s is publicly traded on the NYSE (PZZA). More about the cost of owning a Papa John’s Pizza franchise below.

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Papa John's Franchise Formats Offered

Papa John's offers franchisees both standard and non-standard venues.

Most traditional Papa John's franchise locations offer delivery and take-out orders only; however, a small group of these franchise locations will allow for customer eat-in. Because of their heavy (or exclusive) focus on delivery and take-out service, traditional Papa John's units are ordinarily located along or close to major roads and highways.

Non-traditional Papa John's franchise locations include placements in venues such as mall food courts, hospitals, schools, airports, theme parks, sports stadiums, concert venues, and travel rest stops. These non-traditional formats typically do not offer delivery.

Papa John's Franchise Opportunities - History

Papa John’s Pizza was started by “Papa” John Schnatter in Jeffersonville, Indiana in 1984. Schnatter’s interest in pizza started during his time working in pizzerias in high school, and after graduating from college he took over his father’s tavern business where he began selling his own pizzas. Famously, Schnatter sold his Camaro, bought used pizza-making equipment, and knocked down a broom closet to start his operation. Business went well for Schnatter, and by 1993 Papa John’s was a publicly traded company with nearly 500 locations.

Schnatter had been the face of Papa John’s as well as CEO and Chairman until recently, when a string of scandals ranging from criticisms of the NFL to off-color remarks on conference calls led to his stepping down from both roles. Despite the controversies, Papa John’s remains the third largest pizza chain in the US.

Papa John's Franchise Cost and Requirements

The estimated initial investment required to open a standard Papa John's pizza franchise is $130,120 to $844,420, including a franchise fee of $25,000. The estimated cost to open a non-standard Papa John's franchise ranges from $26,500 to $388,920, including a franchise fee of $5,000. Papa John’s Franchisees must also pay an ongoing 5% royalty on monthly net revenues to the franchisor, ongoing monthly contributions to the brand's national advertising program, and commit to advertising spend in their local market.

Papa John's Franchise System Size and Composition

The Papa John's franchise system has approximately 5,300 units in operation or development, about two thirds of which are based in the U.S. and around 86% of which are franchised (as opposed to corporate-owned) locations. Systemwide, Papa John's locations generate around $4 billion in revenue.

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How much does it cost to open a Papa John's franchise?

The cost to open a Papa John's franchise can vary depending on various factors such as location, size of the store, and local labour costs. However, according to the company's official website, the cost of opening a new Papa John's franchise ranges from $130,970 to $845,020.

The initial investment cost is broken down into several categories, including franchise fee, equipment and supplies, leasehold improvements, utility deposits, and insurance. Here's a breakdown of the estimated costs:

Franchise fee: $25,000
Equipment and supplies: $50,000 - $190,000
Leasehold improvements: $30,000 - $210,000
Utility deposits: $500 - $2,500
Insurance: $3,000 - $6,000
Other costs: $16,470 - $25,000

Note that these figures are estimates and can vary depending on your location and other circumstances. Additionally, there may be ongoing fees such as royalties, marketing fees, and training costs, which can also affect the total cost of owning a franchise.

While the cost of opening a Papa John's franchise may seem daunting, the company provides extensive support and training to new franchisees, including a comprehensive 6-week training program, ongoing operational support, and help with site selection and lease negotiations.

Before investing in a Papa John's franchise, it's important to do your research and consider all the costs and potential risks. You should also reach out to current franchise owners and ask for their advice and experiences.

Papa John's provides extensive training programs and ongoing support to franchisees to ensure their success.
Franchisees have access to comprehensive initial training covering topics such as product preparation, quality control, and customer service.
Papa John's Franchise Business Consultants provide ongoing support and guidance to franchisees in areas such as marketing, cost control, and compliance with company policies.
Marketing materials and strategies are provided to franchisees to attract customers in their area.
Papa John's is constantly innovating and developing new products and strategies to stay ahead of the competition.
Opening a Papa John's franchise typically takes around six months from the time the pre-qualification package is completed to the time the franchise is fully operational.
The financial requirements to become a Papa John's franchisee include a minimum of $75,000 in liquid assets, a minimum net worth of $250,000, and an initial investment of $130,000 to $844,000.
The franchisee needs to find a suitable location, typically in a high-traffic area with adequate parking, and hire and train staff to run the franchise.
As of 2021, there are over 5,395 Papa John's franchises operating in 49 countries around the world.

What is the royalty fee for owning a Papa John's franchise?

Owning a Papa John's franchise can be a lucrative and rewarding business opportunity. However, it is important to note that it also comes with a significant financial commitment in the form of ongoing fees and expenses. One of the most important fees you will be responsible for as a franchisee is the royalty fee, which is essentially your ongoing payment to the franchisor for the right to use their brand name, trademarks, and other intellectual property.

The current royalty fee for Papa John's franchisees is 5% of gross sales.
This fee is paid on a weekly basis and is calculated based on your total sales for the week.
For example, if your Papa John's franchise has $20,000 in gross sales in a week, you would be responsible for paying $1,000 in royalty fees for that week (5% of $20,000).

It is important to note that the royalty fee is not the only expense you will incur as a Papa John's franchisee. In addition to this ongoing fee, you will also be responsible for other expenses such as marketing fees, initial franchise fees, and ongoing training and support costs. These costs can add up quickly, so it is important to carefully consider all of the financial implications before deciding to invest in a Papa John's franchise.

One tip for minimizing your royalty fee and maximizing your profits is to focus on building a strong customer base and maximizing your sales. The more sales you generate, the higher your royalty fee will be, but this will also mean that you are generating more revenue overall. By investing in effective marketing strategies and providing high-quality products and services to your customers, you can build a loyal following and increase your bottom line.

In conclusion, while the royalty fee for owning a Papa John's franchise may seem daunting at first, it is an important aspect of the franchise system that helps to ensure consistency and quality across all locations. With careful planning and a focus on generating sales and building a strong customer base, you can successfully navigate this fee and build a profitable and successful business as a Papa John's franchisee.

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How much money can I make owning a Papa John's franchise?

The amount of money you can make owning a Papa John's franchise depends on several factors such as the location, the size of the store, the competition in the area, and your ability to manage the business properly.

According to Papa John's, the average annual gross sales for a Papa John's franchise is around $900,000. However, some franchises may earn even more than that, depending on their location and other factors.

For example, a Papa John's franchise located in a busy urban area can earn more than a store located in a less populated rural area. Additionally, a franchisee who is able to successfully market the store, manage expenses, and provide excellent customer service can potentially earn more profits than a franchisee who cannot.

In terms of financials, the initial investment for a Papa John's franchise ranges from $130,000 to $850,000. The ongoing expenses include royalty fees, advertising fees, and food costs. Papa John's charges a 5% royalty fee, a 6% advertising fee, and the food cost depends on the menu items and quantity of orders.

It is important to note that running a successful franchise requires hard work, dedication, and capital. As a franchisee, you will be responsible for hiring and training staff, managing finances, ensuring compliance with franchisor's rules and regulations, and maintaining high quality standards. To maximize your profits, it is important to follow the franchisor's guidelines, manage expenses carefully, and maintain good relationships with customers.

Research the market: Before investing in a Papa John's franchise, research the market in your area to understand the competition and the demand for pizza. Choose a location that is easily accessible and visible, preferably in a high traffic area
Follow the franchisor's rules and regulations: Papa John's has established rules and regulations to maintain consistency across all franchises. Sticking to these standards can help you build a strong brand image and increase customer loyalty
Provide excellent customer service: Satisfied customers are more likely to return and recommend your store to others. Train your staff to provide excellent customer service and address customer complaints or concerns promptly and professionally
Manage expenses carefully: Keep track of your expenses and find ways to minimize them without compromising on quality. Negotiate with suppliers for better prices and analyze your inventory regularly to avoid waste
Market your store: Promote your store through social media, local ads, and collaborations with other businesses. Papa John's provides marketing materials and support to help you attract more customers

Overall, owning a Papa John's franchise can be a profitable business venture for those who are willing to put in the effort to make it successful. The potential earnings depend on several factors, including the location, competition, management skills, and the ability to follow the franchisor's guidelines. Research thoroughly and plan carefully before investing in a franchise.

What kind of training and support do Papa John's franchisees receive?

Papa John's is one of the world's largest pizza chains, with over 5,000 locations across the globe. Franchisees who join the Papa John's family are provided with extensive training programs and ongoing support to ensure their success. Here are some details on the training and support they receive:

Initial Training: Papa John's comprehensive training program includes classroom, in-store, and online training sessions. The program covers topics such as product preparation, quality control, customer service, site selection, and operation of the Point of Sale (POS) system.
Franchisee Support: Papa John's Franchise Business Consultants (FBCs) provide ongoing support and guidance to franchisees. They help franchisees with marketing, cost control, employee management, training, and compliance with company policies.
Marketing Support: As a franchisee, you will have access to pre-approved marketing materials, and Papa John's marketing team will help you localize your marketing efforts to attract customers in your area.
Operations Support: Papa John's franchises are supported by a state-of-the-art supply chain and logistics system. The company provides franchisees with a turnkey solution for ordering, scheduling deliveries, and managing inventory.
Innovation and Development: Papa John's is constantly innovating and developing new products and strategies to stay ahead of the competition. Franchisees have the opportunity to attend regular conferences and training sessions to keep up with the latest developments in the industry.

Here are some tips for potential franchisees:

Do Your Due Diligence: Talk to current and former franchisees to get a feel for the business. Consider hiring a professional advisor to help you evaluate the business, its financials, and the local market.
Be Prepared to Invest: Starting a franchise requires a substantial upfront investment. Make sure you have the financial resources to get started and support the business until it becomes profitable.
Follow the System: Papa John's has a proven system for success. Follow the system and take advantage of the support and training provided to increase your chances of success.
Get Involved in the Community: Building a local presence and reputation is key to success as a Papa John's franchisee. Get involved in the community, sponsor local events, and engage with your customers to build loyal following.

In conclusion, Papa John's provides its franchisees with comprehensive training programs, ongoing support, and innovative strategies to stay ahead of the competition. Potential franchisees should do their due diligence, be prepared to invest, follow the system, and get involved in the community to increase their chances of success.

How long does it take to open a Papa John's franchise?

Opening a franchise can be a time-consuming process that involves a variety of steps and requirements. The amount of time it takes to open a Papa John's franchise can vary depending on several factors, such as the location, the level of competition, and the franchisee's ability to meet the franchise's requirements.

According to Papa John's website, it takes around six months to open a franchise. However, this timeline can be affected by various factors, such as the completion of the required paperwork, securing a suitable location, hiring staff, and obtaining the necessary licenses and permits.

Complete the Pre-qualification Package: This is the first step towards opening a Papa John's franchise. The pre-qualification package includes a series of questions to help the franchisor determine if the candidate is a good fit for the company. Once completed, it typically takes about a week for Papa John's to review the application.
Attend Discovery Day: Discovery Day is an opportunity for potential franchisees to visit Papa John's headquarters and meet with the company's management team. This can help applicants learn more about the company and get a better sense of the franchise's culture. The Discovery Day can typically be scheduled within a few weeks of completing the pre-qualification package.
Secure Financing: Papa John's requires a minimum of $250,000 in liquid assets and a net worth of $500,000 to qualify for a franchise. Franchisees need to secure financing to cover the initial franchise fee, training, and related startup costs. This can take several weeks to a few months, depending on the franchisee's financial situation.
Sign the Franchise Agreement: Once the financing is in place, the franchisee can sign the franchise agreement. This agreement outlines the terms and conditions of the franchise, including the length of the agreement, the franchisor's ongoing support, and the franchisee's responsibilities. Signing the agreement can take several weeks, as it can involve legal review and negotiations.
Prepare the Location: The franchisee needs to find a suitable location, typically in a high-traffic area with adequate parking. Depending on the availability of properties, this can take several months. The location needs to be customized to meet Papa John's specific requirements, which can take additional time.
Train Staff: Once the location is secured, the franchisee needs to hire and train staff to run the franchise. All staff members need to complete Papa John's training program, which can take several weeks.

In conclusion, opening a Papa John's franchise typically takes around six months from the time the pre-qualification package is completed to the time the franchise is fully operational. However, this timeline can vary depending on several factors, such as the location, the level of competition, and the franchisee's ability to meet the franchise's requirements.

What are the financial requirements to become a Papa John's franchisee?

As with any franchise, Papa John's requires that prospective franchisees have a certain level of financial stability to ensure the success of the business. Here are some specifics on the financial requirements to become a Papa John's franchisee:

Initial Investment: The initial investment to open a Papa John's franchise ranges from $130,000 to $844,000. This includes a franchise fee of $25,000, training costs, equipment, and other expenses associated with opening a new location.
Liquid Assets: Papa John's requires that franchisees have a minimum of $75,000 in liquid assets. This can include cash, stocks, bonds, or other easily convertible assets.
Net Worth: In addition to liquid assets, Papa John's requires that franchisees have a minimum net worth of $250,000.
Credit Score: Papa John's considers credit score as part of the application process. While there is no specific minimum score required, a good credit history is important to show financial responsibility.
Franchise Fee: As mentioned earlier, there is an initial franchise fee of $25,000. This amount is due upon signing the franchise agreement and is non-refundable.
Royalty and Advertising Fees: Papa John's franchisees are required to pay a royalty fee of 5% of gross sales and an advertising fee of 8% of gross sales. These fees go towards the company's overall marketing and advertising efforts to promote the Papa John's brand.

It's important to note that these are just the basic financial requirements to become a Papa John's franchisee. In addition to these requirements, Papa John's looks for individuals with strong business experience, leadership skills, and a passion for the brand. It's also essential to have a solid business plan in place and to be prepared for the day-to-day challenges of running a franchise.

If you're considering becoming a Papa John's franchisee, it's important to carefully evaluate your financial situation and ensure that you meet the company's requirements. Conduct research and attend a franchise discovery day or speak with current Papa John's franchisees to gain a realistic perspective on what owning a franchise entails. With careful planning and hard work, owning a Papa John's franchise can provide a fulfilling business opportunity.

How many Papa John's franchises are currently operating worldwide?

Papa John's started as a small pizza delivery business in a broom closet in 1984 and has now grown into one of the largest pizza chains in the world. The company's strong brand recognition and commitment to quality ingredients have contributed to its success, allowing it to expand globally.

The United States has the largest number of Papa John's franchises with around 3,400 locations.
The second-largest market is China, with over 300 locations.
Other countries with significant numbers of Papa John's franchises include the United Kingdom, Canada, South Korea, and Mexico.
Papa John's also has locations in other countries such as Saudi Arabia, Egypt, and Jordan, where the company has recently expanded.

Opening a Papa John's franchise can be a rewarding investment opportunity for entrepreneurs interested in the foodservice industry. Papa John's provides support for franchisees, including assistance with site selection, training, and ongoing operational support. Additionally, the company offers franchisees access to their proprietary recipes and ordering systems.

Overall, the success and growth of Papa John's worldwide demonstrate the ongoing popularity of pizza and the demand for quality ingredients and service in the foodservice industry.

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Papa John's franchise

Hassle-free business loans to start your papa john's franchise..

Papa John’ s is a pizza business giant with almost 6,000 locations worldwide. The brand offers consumers eat-in dining, delivery or takeout options and a choice of products that include pizzas, chicken wings, and garlic bread.

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Headquartered in Louisville, Kentucky, Papa John’s began in 1984 and has offered franchise opportunities since 1985. They are the third largest pizza chain in the US, behind Domino’s and Pizza Hut. In 2022 the business had US sales of more than $3.6 billion with average sales per store of more than $1 million per year. They operate in all 50 states plus another 44 countries and territories.

Papa John’s at a glance:

US stores: Approximately 3,180
Required Investor net worth: $750,000
Required investor liquid cash: $250,000
Min. investment: $189,000
Max. investment: $975,000
Standard franchise term: 10 years

Can I start a Papa John's franchise?

Getting into a Papa John’s franchise is not exactly a walk in the park. To start with, you’ll need fairly deep pockets to meet the start-up costs, which can run to almost one million dollars depending on the type of store you choose and where you are located. You’ll also need at least $250k in liquid cash and net worth of $750,000. Then, if you can cover the financial requirements, Papa John’s also expects that at least one franchise partner should have a business background and one partner must have substantial restaurant or retail management experience.

Lastly, the company prefers franchisees who will operate at least five Papa John’s outlets, and you’ll need to live in the area of your restaurants throughout the term of their contracts.

The good news is, that if you can designate a suitable general manager to run the restaurant and they take the necessary training, you can operate your Papa John’s as a passive investment.

How much does a Papa John's franchise cost?

Initial set-up costs for a Papa John’s franchise range from $189,000 to $975,000, ranking as low to high and marking a wide divergence in start-up expenditure. This reflects the fact that the majority of Papa John’s outlets operate as take-out and delivery only businesses, with no scope for sit-in dining and with much smaller premises and fit-out costs.

The initial franchise fee ranges from $5,000 to $25,000. There are no fee discounts or other franchise incentives for military veterans.

After opening, you are required to pay an array of ongoing fees and charges. They include:

Royalty fee: 5% to 6% of net sales
Digital fee: 1.5% of all internet (app) derived sales
Marketing fund: 5% net sales, (non-traditional outlets pay 25% of 5% fee)
Papa Card transactions: 2% Papa Card redemptions
Co-op contributions: Minimum 2% net sales
Local advertising fund: Minimum 8% net sales
On site installation fee: $2,500 for standard 2-day installation, then $1,000 per extra day
Software maintenance fee: $375 per month
Help desk: Flat $80 per month
Training fee: $150 per year
Renewal fee: $1,000 to $4,000
Transfer fee: $4,000

Estimated key costs to open a Papa John’s franchise:

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Are Papa John's franchises profitable?

Yes , but only modestly . The average gross sales of a US-based Papa John’s restaurant in 2023 was $1,135,000, but after all expenses, the reported annual income for the franchisee was only $67,000 and could even be as low as $40,000. This income level is either in line with or well below the average US franchise owner income (all US franchisees) of $60,000 per year.

What is the failure rate for a Papa John’s franchise?

Low to moderate . The failure rate for a Papa John’s franchise is 2% in the first year, rising to 6% by year three.

Why should you start a Papa John's franchise?

Papa John’s competes in a tough segment of the fast-food industry, battling for sales alongside giants like Domino’s, Pizza Hut and Little Cesar’s. Despite average annual sales of more than $1,000,000 per location, profit margins in the pizza business are notoriously tight, and this is reflected in the modest net income that Papa John’s franchisees can expect. That said, the US pizza industry remains strong and if you can start your store at the low end of the investment cost spectrum, it may still be possible to make a solid income from this type of business. In conclusion, if you can keep your profit expectations on the low side and you can maintain a tight grip on start-up and ongoing costs, a Papa John’s franchise may work for you.

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Refurbishments, equipment purchase, ready to be matched with your personal funding manager, what are the franchise territory policies for papa john's.

Franchisees can only operate their restaurant at a specific location as identified in their franchise agreement and may not conduct business at any site other than the restaurant. Franchisees may not relocate the restaurant without written consent of the company. Papa John’s promises not to locate or license another Papa John’s restaurant within a specified radius of the restaurant, generally 1.5 miles. In densely populated urban areas, the territory may be reduced to a one-half mile radius.

What franchise resources does Papa John's offer?

Papa John’s support for franchisees includes:

Training: Papa John’s provides initial training on the operation of the restaurant to the principal operator and the senior management team. All team members must complete new team member orientation training and be certified in a minimum of three of the seven operations stations. The training program takes approximately six weeks to complete. However, the principal operator will also be required to attend one week of training at Papa John’s University. The company reserves the right to require any of the franchisee’s employees or prospective employees to take part in training and instruction as it deems necessary. The principal operator and all restaurant managers may also be required to attend additional training that Papa John’s determines to be necessary or appropriate.
Marketing support : Papa John’s provides promotional and other marketing support for their franchisees.
Third-party financing: Papa John’s provides limited financial support for investors seeking franchise funding. Alternatively you may be able to obtain more economical and flexible funding solutions from the many independent funders who provide business loans to franchise operators.

What is the process for starting a Papa John's franchise?

It begins with an application. Start the process here .

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Swoop requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.

Franchise funding: https://swoopfunding.com/us/blog/funding-your-franchise-a-guide-for-franchisees/

Profitability: https://sharpsheets.io/blog/papa-johns-franchise-costs-profits/

Papa John’s franchise application: https://www.papajohns.com/franchise/investment-requirements/

Papa John’s: https://www.papajohns.com/franchise/

Owner income: https://www.mashed.com/188952/how-much-papa-johns-franchise-owners-really-make-per-year/

Failure rate: https://www.vettedbiz.com/franchises/papa-johns/

Set-up costs: https://www.franchisedirect.com/foodfranchises/papa-johns-franchise-07050/ufoc/

US sales 2022: https://www.qsrmagazine.com/operations/fast-food/ranked-the-top-fast-food-pizza-chains-in-america/

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Papa Johns plans more marketing and more locations

Papa Johns franchisees plan to contribute more to the brand’s marketing fund in a bid to generate stronger sales as part of a broad-based strategic growth initiative the pizza chain announced on Monday.

That initiative also includes new incentives for franchisees to add new units, including a waiver on their marketing contribution for five years. That waiver is designed to speed the time it takes for an operator to generate a return on a new location.

Papa Johns also plans to increase its charges to franchisees for cheese and other supplies. But even that has a provision designed to encourage franchisees to add new locations.

Papa Johns, like many other pizza chains, operates a commissary business. It then charges franchisees for those supplies at a specified margin.

The company plans to increase its commissary charges so its profit margin on that business is 8%, rather than 4%. Those charges will increase by 100 basis points in each of the next four years to get to that 8% margin.

Papa Johns said the change in the commissary charges will ultimately increase franchisees’ restaurant-level costs by 100 basis points.

Franchisees that increase their purchases of supplies the most could get annual rebates that ultimately mitigate the entire increase in supply costs. The company said that higher sales from the increased marketing, along with the new units, could ultimately reduce the shared supply chain costs throughout the system.

“We are optimizing our investments in data science and our marketing tech stack to unlock value for both the top and the bottom line,” CEO Rob Lynch said in a statement. He said franchisees voted to increase their own marketing fund, “giving us more fuel to accelerate comparable sales growth and increase restaurant profitability.”

Franchisees agreed to increase their marketing fund contributions by 20%, or 1% of their sales. The company said that a review of its marketing strategy “identified significant opportunities” to improve audience selection, offer differentiated solutions in the pizza category, improve return on ad spending, loyalty and “create cultural buzz.”

The increased spending also gives the company the ability to use that marketing fund as an incentive to encourage development.

Papa Johns operates 3,200 locations in the U.S., but the company has long said that its sales improvement domestically deserves a higher number of restaurants. Indeed, its unit count still hasn’t recovered from closures in 2017 and 2018 when sales fell in the aftermath of controversial comments from founder John Schnatter.

The company has long used incentives to encourage domestic development but its newest incentive is the largest in its history.

Papa Johns also said that it plans to change its business structure internationally to improve its position in key markets, encourage targeted investments and improve services to customers and operators.

It plans to establish hubs to operate different regions around the world, led by general managers who work with franchisees in those markets to share best practices, marketing and technology with local preferences in mind.

The company plans to increase technology investments in international markets, and it plans to improve operations in its U.K. market, its biggest international market. Papa Johns closed low-performing franchise restaurants in the fourth quarter and expects more closures of low-volume restaurants this year. The company said that the move will increase the profitability of existing locations.

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Papa Johns :

Papa Johns Declares Quarterly Dividend

LOUISVILLE, Ky. - ( BUSINESS WIRE ) - May 3, 2024 - Papa John’s International, Inc. (NASDAQ: PZZA) today announced that the Board of Directors has declared a quarterly dividend of $0.46 per common share, payable May 31, 2024, to shareholders of record at the close of business on May 20, 2024. At this quarterly dividend rate, the annual dividend is equivalent to $1.84 per common share.

About Papa Johns

Papa John’s International, Inc. (NASDAQ: PZZA) opened its doors in 1984 with one goal in mind: BETTER INGREDIENTS. BETTER PIZZA.® Papa Johns believes that using high-quality ingredients leads to superior quality pizzas. Its original dough is made of only six ingredients and is fresh, never frozen. Papa Johns tops its pizzas with real cheese made from mozzarella, pizza sauce made with vine-ripened tomatoes that go from vine to can in the same day and meat free of fillers. It was the first national pizza delivery chain to announce the removal of artificial flavors and synthetic colors from its entire food menu. Papa Johns is co-headquartered in Atlanta, Ga. and Louisville, Ky. and is the world’s third-largest pizza delivery company with more than 5,900 restaurants in approximately 50 countries and territories. For more information about the company or to order pizza online, visit www.PapaJohns.com or download the Papa Johns mobile app for iOS or Android.

Forward-Looking Statements

Certain matters discussed in this press release which are not historical facts are “forward-looking statements” that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see “Part I. Item 1A. - Risk Factors” of the Annual Report on Form 10-K for the fiscal year ended December 31, 2023. We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise.

SOURCE Papa John’s International, Inc.

Papa Johns Investor Relations [email protected]

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Elektrostal, Moscow Oblast /
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Menu at Papa Johns restaurant

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Menu added by users april 27, 2023.

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PAPA JOHN'S, Elektrostal - Sportivnaya St. 25A - Restaurant Reviews & Phone Number - Tripadvisor