Papa John’s Franchise Failure Rate, Profit & Owner Salary 2024

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!

How Much Does A Papa John's Franchise Owner Make

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

Cost or FeeAmount or Percentage
Franchise fee$25,000
Royalty fee5.5%
Marketing fee8.0%
Investment (mid-point)$354,000
Average sales$1,101,000
Payback period2 years
Minimum net worth$750,000
Minimum liquid capital$250,000

How Much Does it Cost to Open a Papa John’s Franchise?

ExpenseStandard restaurantNon-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 In Revenue?

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.


Pros & 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 a franchise owner salary in the range of $110,112 – $329,165, with the average profit being $165,169.

This is how we calculated this amount:

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%1101127.00
Rent10.63%(116994.74)
Insurance5.31%(58497.37)
Salaries21.25%(233989.49)
Franchise Royalty Fees5.31%(58497.37)
Utilities2.13%(23398.95)
Cost of Goods Sold (COGS)26.56%(292486.86)
Labor (Variable)13.81%(152093.17)
Total (Expenses)85.00%(935957.95)
Net Profit15.00%165169.05

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.


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:

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
201925542544-10
202025442546+2
202125462564+18

For the Franchised outlets:

  • In 2019, the failure rate was (10)/2554×100≈0.39%
  • In 2020, the growth rate was (2)/2544×100≈29.8%
  • In 2021, the growth rate was (18)/2546×100≈0.078%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2019645598-47
2020598588-10
2021588600+12

For the Company-Owned outlets:

  • In 2019, the failure rate was (47)/645×100≈7.28%
  • In 2020, the failure rate was (10)/598×100≈1.67%
  • In 2021, the growth rate was (12)/588×100≈2.04%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
201931993142-57
202031423134-8
202131343164+30

For Total outlets:

  • In 2019, the failure rate was (57)/3199×100≈1.78%
  • In 2020, the failure rate was (8)/3142×100≈0.25%
  • In 2021, the growth rate was (30)/3134×100≈0.95%

According to the above-mentioned data, 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.

We can see that the franchised outlets for Papa John’s declined in the year 2019, showing a failure rate of 0.39%. However, in next years that is 2020 and 2021, the number of Papa John’s franchise increased showing a growth rate between 29.8% and 0.078%.

On the other hand, for company-owned outlets, the failure rate of Papa John’s was lying in the range between 7.28% and 1.67% for the same period. But then the number of outlets increased in the year 2021 showing a growth rate of 2.04%.

Overall, when we combine the data of franchise and company-owned outlets, we can see that the Papa John’s franchise has decline in the years 2019-2020 showing a total failure rate between 1.78% and 0.25%. But gradually, improved its position in 2021, showing a growth rate of 0.95%.


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
AVERAGE PROFIT PERCENTAGE15%
AVERAGE PROFIT PER YEAR$165,169
AVERAGE PAYBACK PERIOD2 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.


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 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. 


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.


Facts About Papa John’s

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


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 Cost includes 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 franchise?

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.

Where is Papa John's Headquartered?

Papa John’s has its headquarters in Atlanta, Georgia.

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