Papa John’s, the third largest pizza chain in the world, is a business that many entrepreneurs eye for, and if you are one of them, then this guide is for you!
In this article, we reveal how much does a Papa John’s franchise owner make, is Papa John’s profitable? How can you qualify and more!
So make sure you do not leave out anything!
About Papa John’s
Papa John’s was started by “Papa” John Schnatter in 1984 in Jeffersonville, Indiana.
It all started when he decided to revamp and turn a broom closet in the back of his dad’s tavern into a Pizza room. Even to purchase equipment to make Pizza, John Schnatter had to sell his 1971 Camaro ZS8.
However, thanks to his delicious pizza, he was soon able to make enough money to buy a place to sell pizza adjoining his dad’s tavern.
Consequently, he came up with a dipping sauce recipe that is the trademark of Papa John’s Pizza today, and the rest is history.
Today, Papa John’s is the third largest pizza chain in the world and has more than 5,706+ Papa John’s locations in 49 states and counting.
Papa John’s offers franchise opportunities to individuals with relevant experience, and to own its franchise, the individual must also have a minimum net worth of $750,000 and $250,000 in liquid assets or cash.
To find out how much you can make as a Papa John’s franchise owner, keep on reading!
Papa John’s Franchise Key Investment Figure
| Franchise fee | $25,000 |
| Royalty fee | 5.5% |
| Marketing fee | 8.0% |
| Investment (mid-point) | $354,000 |
| Average sales | $1,101,000 |
| Payback period | 2 years |
| Minimum net worth | $750,000 |
| Minimum liquid capital | $250,000 |
How Much Does it Cost to Open a Papa John’s Franchise?
| Expense | Standard restaurant | Non-standard restaurant |
|---|---|---|
| Initial franchise fee | $25,000 | $5,000 |
| Operating expenses | $39,000 | $39,750 |
| Advertising | $6,500 | $6,500 |
| Formation costs | $424,030 | $161,610 |
| Total | $494,530 | $212,860 |
How Much Does A Papa John’s Franchise Owner Make?
The sales of a Papa John’s franchise may vary based on the number of employees they have, location, demand in the area, etc.
However, according to the 2021 FDD, Papa John’s franchise owners make sales of $1,101,127 a year on average.
Also, during this period, the lowest-performing franchises made $364,154 in sales, while the top-performing franchises made $3,177,600.
Please note that this figure shows sales of only the traditional franchised restaurants.
How Much Does Papa John’s Employee Earn?
The pay of Papa John’s employees may be different for people with different designations, skills, experience levels, etc.
However, according to Indeed, on average, Papa John’s pays its employees $8.00 per hour for someone with the title of Fast Food Manager to $15.30 per hour for someone with the title of Maintenance Technician.
In yearly terms, the average Papa John’s salary ranges from $26,386 per year for someone with the title of Manager to $92,000 per year for someone with the title of Truck Driver.
Pro & Cons Of Papa John’s Franchise
Pros Of Papa John’s Franchise
- Recognized brand.
- 100% customer satisfaction.
- International presence.
- Very profitable.
- Proven business model.
- Comprehensive training and support.
- Allows absentee-ownership.
Cons Of Papa John’s Franchise
- Competitive pizza industry.
- No financial assistance.
- High marketing fees (8%).
Papa John’s Franchise Average Revenue & Profit
Papa John’s is quite a profitable franchise opportunity to invest in, thanks to its impeccable pizzas and out-of-the-world sauces.
As mentioned earlier, Papa John’s franchises generate average sales of $1,101,127 per year.
And with a profit margin between 10%-30%, it generates profit in the range of $110,112 – $329,165, with the average profit being $165,169.
Papa John’s Franchise Failure Rate
To determine what is the failure rate of Papa John’s franchise let us look at the table below:
| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2019 | 2554 | 2544 | -10 |
| 2020 | 2544 | 2546 | 2 | |
| 2021 | 2546 | 2564 | 18 | |
| Company- Owned | 2019 | 645 | 598 | -47 |
| 2020 | 598 | 588 | -10 | |
| 2021 | 588 | 600 | 12 | |
| Total Outlets | 2019 | 3199 | 3142 | -57 |
| 2020 | 3142 | 3134 | -8 | |
| 2021 | 3134 | 3164 | 30 |
As we can see, over the last three years, the company-owned Papa John’s outlets have been closing, and only a few franchise-owned outlets opened.
This could have been due to the impact of Covid-19 for all we know. Regardless, the number seems concerning.
Papa John’s Franchise Payback Period
To find out the payback period of the Papa John’s Franchise, let us do some calculations.
| AVERAGE INVESTMENT | $354,000 |
| AVERAGE REVENUE PER OWNER | $1,101,127 |
| AVERGAGE PROFIT PERCENTAGE | 15% |
| AVERGAGE PROFIT PER YEAR | $165,169 |
| AVERAGE PAYBACK PERIOD | 2 years |
PAYBACK PERIOD = TOTAL INVESTMENT / PROFIT PER YEAR
= 354000/165169 = 2.1 = 2 Years based on median
The average investment for a Papa John’s Franchise is $354,000.
With an average profit percentage of 15%, the average profit per year is $165,169.
This means that the average payback period for a Papa John’s Franchise is 2 years, and the total investment of $354,000 would be recouped within this period.
Facts About Papa John’s
- John Schnatter worked as a dishwasher at Rocky’s Sub Pub before becoming a pizza maker.
- John started selling pizza out of a broom closet located at the back of his dad’s tavern called Mickey’s Lounge.
- Papa John’s made $1 billion+ in sales and opened 2000 locations within just the first 15 years of business.
- Papa John’s was the first pizza chain that started offering nationwide pizza delivery in 2001.
- John had to sell his beloved car 1971½ Chevrolet Camaro Z28, to open his pizza kitchen, but then years later, he got it back.
- Pizza Hut and Papa John’s are bitter enemies.
- Papa John’s holds a Guinness world record for most Pizza tossing.
- Papa John’s was the favorite pizza place of rapper Iggy Azalea.
((https://www.mentalfloss.com/article/68488/11-better-facts-about-papa-johns))
What Is Papa John’s Known For?
Papa John’s is best known for their large-sized pizza that is made with its special signature sauce.
Their priority has always been “quality is at the core.” and they take pride in using fresh and very high-quality ingredients for their sauces, dips, pizza dough, etc.
Moreover, Papa John’s is also ranked #1 in customer satisfaction and product quality among all National Pizza chains as per the American Customer Satisfaction Index and is a beloved destination for pizza lovers around the world.
Here is a list of all the popular items at Papa John’s pizza:
- The Works Pizza
- Pepperoni Pizza
- Philly Cheesesteak Pizza
- Cheese Pizza
- Garden Fresh Pizza
- BBQ Chicken Bacon Pizza
- The Works Pizza
- Cheesesticks
- Pizza Sauce
- The Meats Pizza
Is Papa John’s Franchise Profitable?
Papa John’s is definitely a profitable franchise to invest in, with franchise owners earning profits in the range of $110,112 – $329,165.
If we compare this with the initial average investment amount of $354,000, the number seems really good.
The payback period also determines whether a franchise is profitable or not. And as we shared in the article above, the payback period of Papa John’s franchise is 2 years which is excellent.
So in terms of money, Papa John’s is a good franchise to invest in.
Papa John’s Franchise Earning Potential
Papa John’s is continuously growing and expanding worldwide and offers both national and international opportunities to eligible candidates.
Papa John’s franchise owners have made as much as $3,177,600 in sales. So there seems to be a good earning potential, although it will vary based on the location of the franchise a lot.
Papa John’s also offers different franchise models to choose from right, from traditional outlets to drive-through outlets and more. So your earning potential will also be influenced by that a lot.
Wrap Up
Now that we have looked at all the major details of Papa John’s franchise, this is what we conclude.
Papa John’s franchise requires an average investment of $354,000, and in return, it can generate sales of $1,101,127 on average, which is excellent.
Because the sales are much higher than the initial investment, you can easily recover your initial investment amount within just 2-3 years.
So in terms of investment and profitability, Papa John’s is a good franchise to invest in, and we do not see a major deterrent that should stop you from getting this franchise.
Frequently Asked Questions
What is the royalty and advertisement fees of Papa John's franchise?
Papa John’s charges a royalty fee of 5.5% of net sales and advertising fees of 8%, which is very high as per the industry standard of 4-4.5%.
What is the franchise fee of Papa John's?
The franchise fee of Papa John is $25,000 which is at par with the industry standard.
What is the financial requirment to open a Papa John's francchise?
If you want to open a Papa John’s franchise, then you must have the following:
- Net worth of $750,000.
- $250,000 in liquid assets or cash.
Additional franchise qualification requirements are:
- Multi-unit management experience.
- Or experience in managing restaurants or retail.
- Or People with management experience.
Amit Gupta is the founder of DrFranchises – a digital marketing agency that helps brands rank better on Google Maps through local SEO strategies. Amit has over 11 years of experience in digital marketing, SEO, email marketing, and social media marketing. He’s also the owner of multiple franchises and has helped countless brands achieve success online. When he’s not working, Amit can be found playing with his dog.