Papa Johns
Papa Johns offers quick-service pizza restaurants with franchises ranging from $111,000 to over $853,000. Known for its pizza delivery service, Papa Johns operates in the fast-food restaurant industry.
About Papa Johns
Papa John's International, Inc., trading as Papa Johns, is an American pizza restaurant chain. As of 2023, it is the fourth largest pizza delivery restaurant chain in the United States, with headquarters in the Louisville, Kentucky, and Atlanta, Georgia, metropolitan areas.
Read more on Wikipedia → · Facts from Wikipedia (CC BY-SA)
Papa Johns franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a Standard Papa Johns franchise ranges from $261,165 to $853,365. For a Small-Town Papa Johns franchise, the range is also between $111,000 and $403,915 [p.1]. Non-Traditional Papa Johns franchises require an investment of $111,000 to $403,915 [p.1], which includes a Development Fee Deposit that can range widely depending on the number of restaurants planned [p.29].
What is the initial franchise fee?
The initial franchise fee for a Non-Traditional Restaurant or Small Town Restaurant is $5,000 and is non-refundable [p.14]. For standard Restaurants, the initial franchise fee ranges from $5,000 to $25,000 and is also non-refundable, with potential incentives that could affect this amount [p.13].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is 5% of Net Sales, with a maximum potential increase to 6%, but this can only happen if new franchise agreements at the time of the increase also provide for a Royalty rate of at least 6%. Additionally, each month during the term, the franchisee must make contributions and expenditures for advertising as part of their obligations to support the brand's goodwill and public image. [p.113], [p.185], [p.193]
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement is for an initial term of 5 years [p.239, p.183]. You have the option to renew it for one additional 5-year term (the "Renewal Term") if all specified conditions are met [p.239, p.183]. This isn't specified in the excerpts for a 10-year initial term or automatic renewal upon expiration of the term.
Can I sell or transfer my franchise, and what does that require?
You cannot sell or transfer your franchise interest without the franchisor's prior written consent, except to a Permitted Transferee, in which case no transfer fee is payable [p.272]. Additionally, if you own the premises, you must notify the franchisor of any intention to sell the Premises along with the Restaurant and provide proof of ownership [p.190, p.246]. The franchisor also has a right of first refusal on such sales [p.190, p.246].
On what grounds can the franchisor terminate the agreement?
This isn't specified in the excerpts.
What financial requirements — net worth and liquid capital — do I need to qualify?
The franchisee must have a consolidated net worth of at least $_________ as of the Effective Date and maintain it throughout the Term [p.383]. Liquidity and minimum net worth requirements can be amended by the franchisor provided such amendments apply consistently to all U.S.-based franchisees [p.389]. This isn't specified in the excerpts for liquid capital requirements.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory [p.56]. You may face competition from other Papa Johns franchisees and other competitive brands within your designated area [p.245][p.109]. The territory protections are limited, and the company reserves the right to change or restrict it if necessary [p.245][p.109].
What training and ongoing support does the franchisor provide?
The franchisor provides initial installation, training, and support for the Information System over a two-to-four-day process [p.51]. Additionally, they offer on-site training with their support team to cover duties such as staffing, food preparation, and dough management before the Restaurant opens [p.50]. For the first two Restaurants, an opening support team is provided by the franchisor to conduct this training [p.50]. This isn't specified in the excerpts for ongoing support beyond the initial openings.
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor does not make any financial performance representations other than the ones specified in Item 19 of the disclosure document. However, if purchasing an existing outlet, written substantiation for these financial performance representations may be provided upon reasonable request [p.80]. This isn't specified in the excerpts regarding sharing earnings information proactively with prospective franchisees.
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only those products and services approved or specified by the franchisor [p.63]. You must also make all menu items specified by them available for sale from the Restaurant [p.63], with some exceptions like delivery service requirements [p.63]. For supplies, you may have to buy or lease items from the franchisor or a limited group of suppliers they designate, which might be more expensive than other options [p.3].