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.
Headquartered in Louisville, Kentucky, Papa John’s began in 1984 and has offered franchise opportunities since 1985. They are the third largest pizza chain, behind Domino’s and Pizza Hut. In 2022 the business had sales of more than $3.6 billion with average sales per store of more than $1 million per year.
Papa John’s at a glance:
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.
Initial set-up costs for a Papa John’s franchise range from $130,000 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 is $35,000. 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:
| Key Costs Guide | Low | High |
|---|---|---|
| Franchise fee | $35,000 | $35,000 |
| Real estate brokerage fees | $0 | $10,000 |
| Construction costs/leasehold improvements | $25,000 | $405,000 |
| New store map package expenditures | $0 | $1,050 |
| Furniture and fixtures | $37,000 | $320,000 |
| Information system | $0 | $30,000 |
| On-site support | $0 | $2,500 |
| On-site installation fee | $0 | $5,000 |
| Technology and maintenance | $0 | $1,125 |
| Signage | $8,000 | $30,000 |
| Additional tools and supplies | $1,000 | $2,500 |
| First month’s rent | $0 | $5,000 |
| Security deposit, other deposits and insurance | $1,000 | $8,500 |
| Opening inventory and supplies | $2,000 | $10,000 |
| Training expenses | $2,000 | $30,000 |
| Grand opening expenses | $3,000 | $10,000 |
| Miscellaneous expenses | $2,000 | $20,000 |
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Yes, but only modestly. The average gross sales of a Canada-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 Canadian franchise owner income (all Canadian franchisees) of $60,000 per year.
Low to moderate. The failure rate for a Papa John’s franchise is 2% in the first year, rising to 6% by year three.
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 Canadian 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.
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.
Papa John’s support for franchisees includes:
It begins with an application. Start the process today.
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Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.
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