Most food franchises may reach millions of dollars in investment. But Papa John’s is a bit different. That’s because the financial requirements for the said franchise would not exceed the $1 million mark. If you like selling pizzas, you could leverage the growing popularity of the company.
Interested? Read on to know the Papa John’s franchise cost so that you could set up your store right away!
Average Papa John’s Franchise Cost
The initial investment for a Papa John’s franchise depends on the type of restaurant you plan to establish. For instance:
- Investment for a standard restaurant averages $129,000 to over $844,000
- A non-traditional unit ranges $26,500 to over $388,000 in investments
The initial Papa John’s franchise cost already includes the franchise fee plus startup costs such as:
- Real estate (fees and rent)
- Equipment
- Opening costs
- Additional funds (supporting the initial phase of the business)
Papa John’s Franchise Startup Fee
The Papa John’s franchise startup fee costs $25,000. It’s much lower, about $5,000 if you’re putting up a non-traditional restaurant according to Franchise Direct.
The franchise fee is a one-time payment that allows you to use the company’s trademark and products.
Real Estate
Your location would also depend on your chosen restaurant type. Traditional units are typically leaseholds located in or near main thoroughfares, while you could find non-traditional units in sports stadiums or arenas. The latter also do not offer delivery services.
You should prepare for the following real estate expenses:
- Traditional restaurant
- Real estate brokerage fee: $10,000
- Professional fees: $500 to $12,000
- Construction/leasehold improvement: $50,000 to $500,000
- On-site support fee: $2,500
- On-site installation and support fee: $5,000
- First month’s rent: $1,200 to $5,000
- Security deposit and other deposits, insurance premium: $500 to $8,500
- Non-traditional restaurant
- Real estate brokerage fee: $5,000
- Professional fees: $1,000 to $7,500
- Construction/leasehold improvement: $125,000
- On-site support fee: $2,500
- On-site installation and support fee: $5,000
- First month’s rent: $3,000
- Security deposit and other deposits, insurance premium: $1,000 to $6,000
Equipment
To complete your store, you’d have to furnish it with the following:
- Dishwashers
- Refrigerators
- Kitchen furniture and fixtures
- Pizza ovens
- Pizza prep tables
- Point-of-Sale (POS) system
- Restaurant lighting
For a traditional restaurant, the price of equipment runs from $30,000 to $120,000. Furnishings for unconventional units, on the other hand, cost $80,000.
Opening Costs
Once you have settled the Papa John’s franchise startup fee and the restaurant itself, you’d have to prepare for a grand opening. How else would you launch your business, right?
The following make up the opening expenses:
- Traditional restaurant
- Information system: $20,000 to $30,000
- Helpdesk service fee: $1,000
- Software enhancement fee: $210
- Signage: $3,000 to $20,000
- Opening inventory and supplies: $3,000 to $10,000
- Grand opening advertising: $3,000 to $10,000
- Miscellaneous: $2,500 to $20,000
- Non-traditional restaurant
- Information system: $30,000
- Helpdesk service fee: $1,000
- Software enhancement fee: $210
- Signage: $3,000 to $20,000
- Opening inventory and supplies: $2,000 to $12,500
- Grand opening advertising: $10,000
- Miscellaneous: $2,500 to $20,000
Additional Funds
Once your franchise is up and running, you’d be spending some money even before gaining any profit. Hence, an additional fund is necessary to cover the regular expenses.
For both restaurant types, you need to prepare around $15,000 to $50,000 to cover the first three months. Some of the expenses included in the initial business phase are debt payments, rent, and utilities.
Requirements to Become a Papa John’s Franchise Owner
What does it take to become a Papa John’s franchise owner? According to their official page, the qualifications include:
- Minimum of $50,000 in cash or liquid assets
- Minimum net worth of $250,000
- Ability to obtain financing up to $275,000
- Management experience
- Restaurant or retail experience
The process to own a franchise, on the other hand, is fairly easy. First, you have to check the areas available for business. After the selection, you need only to fill out and submit an online application form.
You’d then receive an initial cost from a franchise representative. Next, you need to complete the additional requirements, undergo an operational interview, and visit the corporate headquarters. Once you’re approved by the board, you’re ready to go!
Training
As a franchise owner, you would undergo training for six to eight weeks. You’d train onsite, at the headquarters, and at one of the company’s restaurants. Your employees or prospective employees may also be required by Papa John’s to take part.
The expenses for the training run from $1,000 to $15,000 if you’re planning to set up a standard restaurant. Non-traditional units, on the other hand, could cost you $2,000 to $6,000.
Additional Fees
Aside from the initial investment expenses, expect to pay for the following fees:
- Royalty Fee: 5% of net sales
- Marketing fee (local advertising): 8% of net sales
- On-line transaction fee: 1.5% of net sales
- Transfer fee: $4,000
- Renewal fee: $4,000
- Training fees: $100 per year (per restaurant)
Financing
Where can you get your finances for a Papa John’s franchise? The company is connected with third-party sources that provide assistance to cover startup costs and equipment.
One such company is the Balboa Capital, which provides a financing program to help you with restaurant equipment. The plans they offer may reach up to $1 million per owner or operator.
Incentive
Aside from financing, you could further save money on your initial run if you avail of Papa John’s incentive program. With the current 2017 plan, you won’t have to pay $25,000 for the franchise fee. You would also receive a free set of ovens for each of your store. Lastly, you could enjoy a food credit of $3,000 (if applicable).
There are also reduced royalty fees under the program including:
- First 12 months: 1% Royalty
- Second 12 months: 2% Royalty
- Third 12 months: 3% Royalty
- Fourth 12 months: 4% Royalty
- After 4 years: Standard rate of 5%
This incentive, plus the low financial requirement, makes Papa John’s a pretty good investment. Add in your passion for food selling, and you’ll surely make it big while doing away with the hefty initial fee.
May the legacy of Papa John’s pizza live on through your franchise!