The process of buying a franchise for Papa John’s is straightforward but the most important thing at the end of the day is to qualify from a financial point of view. Franchises are a great option for many businessmen since there is immediate support gained from a brand that is already established. However, this does not mean that risks do not exist. Thankfully, these are lower than ever because of the constant growth that the franchise now goes through.
One of the first things you should be aware of is that the best possible discounts are going to be offered for the operators in the US. We will mainly talk about those and you can expect to have stricter and larger financial requirements in other countries. Even so, when you compare franchising costs with other fast food restaurant chains like Taco Bell or McDonald’s, costs are still lower.
If you want to buy a Papa John’s franchise you should be ready to have an investment of around $250,000. This is around 4 times less than what you would pay with the other two franchises mentioned. This is in part because the restaurants normally generate lower revenue per single unit than the other main fast food brands that offer franchising.
A Papa John’s restaurant is expected to generate sales in value of $800,000 to $1,000,000 per year. When looking at the top fifty fast food chains in the world, this is actually number 40. Even so, there is profit and the investment can be a great first step put into the business world.
Besides the first costs you will need to go through, the franchisees need to pay 2 monthly fees:
- Royalty fee – 5% of the net sales
- Advertising fee – 8% of the net sales
A great thing people are really happy with is that the process of getting the franchise going is pretty simple. You just need to fill an application and then the business is going to organize a credit report. Your financial ability is basically considered. Generally, personal net worth needs to be over $150,000 and $50,000 should be available in liquidity. Financing availability should go as high as $200,000 or more. This covers the regular franchise one time initial fee of $25,000 and offers security for Papa John’s.
Business management background is usually required but only one of the investors need this. Because of this, opening the franchise together with a partner can be a very good idea. A Franchise Disclosure Document needs to be sent and you will have to visit the Kentucky Papa John’s headquarters for special training. When you are approved you receive access to training, marketing support, training support and special marketing data that can be used for local advertising. If desired, Papa John’s will assist with every single part of running the franchise.