Papa Johns Franchise Cost & Fee, Papa Johns FDD & Franchise Information

Papa Johns

Date of Incorporation: 1984

Franchising Since: 1985

Headquarters: Louisville, Kentucky

Country: U.S.

Description: The franchisor, Papa John's International, Inc., operates and sells franchises for the operation of pizza businesses known as Papa John's restaurants. They also sell certain items to the franchisees.

Franchise Offer: The franchise offered is for the operation of a fast food restaurant specializing in pizza and limited additional menu items under the name "Papa John's." This can be a standard program, or a non-traditional program at non-traditional sites such as malls, hospitals, schools, airports, parks, and others.

Financial Assistance: Neither the franchisor nor any agents or affiliates offers, directly or indirectly, any financing arrangements. In the U.S., however, the franchisor does offer a 2011 Development Incentive Program for which full program details available to prospective franchisees upon the completion and review of a Franchise Application. Certain restrictions apply.

Training and Assistance: Before the opening of the franchisee’s first restaurant, the franchisor will provide initial training on the operation of the restaurant to the principal operator and the restaurant managers. The principal operator must attend training in a certified training restaurant identified by the franchisor, and at Papa John's University in Louisville, Kentucky. There is a minimum of five weeks of operations training as outlined by Papa John's management training program, and one week of mentoring with an existing principal operator designated by Papa John's International, Inc., to include two days of training general manager certification conducted by a Papa John's International, Inc. representative. There is also a multi-unit management training unit for the principal operator if the franchisee is contemplating development of more than one restaurant.

Territory: The franchisee must operate the restaurant at a specific location identified in the Franchise Agreement. He or she may not conduct business at any site other than the restaurant, or relocate the restaurant without written consent, which the franchisor will not unreasonably withhold. The franchisor will not, during the term of the Franchise Agreement, locate nor license another to locate a standard Papa John's restaurant within a specified radius of the restaurant, generally 1.5 miles. If the franchisee opens a Non-Traditional Restaurant, the Territory for that Restaurant will extend only to the bounds of the site in which the Non-Traditional Restaurant is located.

Term of Agreement and Renewal: The length of the franchise term is 10 years. The franchisee may renew an additional 10 year term if he or she meets the requirements.

Obligations and Restrictions: The franchisee or the managing shareholder or partner is not obligated to participate personally in the direct operation of the restaurant. The franchisee must designate an individual to serve as the principal operator under both the Development Agreement and Franchise Agreement. If the franchisee is an individual, then he or she is the principal operator. If the franchisee is a corporation, limited liability company or partnership, the principal operator must meet the following qualifications: The principal operator must be an approved person who completes the initial training requirements and who participates in and successfully completes all additional training as may be reasonably designated. The franchisee must offer for sale and sell only those products and services approved and must make all menu items specified by the franchisor available for sale by carry-out and delivery service from the restaurant, except that no delivery service may be provided from a Non-Traditional restaurant without written consent. The franchisee may not offer for sale any products or provide any services that have not been approved.

Total Number of Units: Over 3,500 units.

Investment Tables:

Initial Investment:

Standard Restaurant

Name of Fee	Low	High
Initial Franchise Fee	$5,000	$25,000
Real Estate Brokerage Fees	$0	$10,000
Professional Fees	$500	$12,000
Construction/Leasehold Improvements	$40,000	$200,000
Furniture, Fixtures and Equipment	$30,000	$120,500
Papa John's PROFIT System™	$8,500	$25,000
On-Site Support Fee	$0	$2,500
On-Site Installation Fee	$0	$3,000
Help Desk Service Fee	$0	$1,000
Software Enhancement Fee	$123	$123
Signage	$3,000	$15,000
First Month's Rent	$1,200	$3,600
Security Deposit and other deposits, Insurance Premium	$1,000	$8,400
Opening Inventory and Supplies	$3,000	$10,000
Grand Opening Advertising	$3,000	$10,000
Training Expenses	$1,000	$12,000
Miscellaneous Opening Costs	$2,500	$20,000
Total Estimated Initial Investment (Pre-opening)	$98,823	$479,123
Additional Funds - 3 months	$15,000	$50,000
Total Estimated Initial Investment (Pre-opening and first 3 months of Operation)	$113,823	$529,123

Non-traditional Restaurant

Name of Fee	Low	High
Initial Franchise Fee	$5,000	$5,000
Real Estate Brokerage Fees	$0	$5,000
Professional Fees	$1,000	$7,500
Construction/Leasehold Improvements	$15,000	$125,000
Furniture, Fixtures and Equipment	$25,000	$75,000
Papa John's PROFIT System™	$0	$25,000
On-Site Support Fee	$0	$2,500
On-Site Installation Fee	$0	$3,000
Help Desk Service Fee	$0	$1,000
Software Enhancement Fee	$0	$123
Signage	$3,000	$20,000
First Month's Rent	$1,000	$3,000
Security Deposit and other deposits, Insurance Premium	$1,000	$6,000
Opening Inventory and Supplies	$2,000	$12,500
Grand Opening Advertising	$0	$10,000
Training Expenses	$2,000	$6,000
Miscellaneous Opening Costs	$2,500	$20,000
Total Estimated Initial Investment (Pre-opening)	$57,500	$326,623
Additional Funds - 3 months	$15,000	$50,000
Total Estimated Initial Investment (Pre-opening and first 3 months of Operation)	$72,500	$376,623

Ongoing Fees:

Name of Fee	Amount
Royalty	Standard Program: 5% of Net sales of the restaurant for each period; Loyalty program: 4.5% of net sales of the restaurant for each period
On-Line Transaction Fee	2% of Net Sales via Internet on-line ordering
Transfer	$4,000, or if transfer is of multiple restaurants to more than one unaffiliated transferee; $4,000 per transferee
Renewal	$4,000
Audit Expenses	Cost of audit, understatement plus interest at 12% per annum
Management Fee	Compensation, travel and living expenses of the appointed manager and a reasonable per diem fee determined
Costs, Attorneys Fees and Pre-judgment Interest	Will vary under circumstances
Indemnification	Will vary under circumstances
Marketing Fund Contributions	Maximum - Up to 3% of Net Sales unless higher amount approved by 2/3 majority vote of Members. As of 12/31/08, 2.82%. Non-Traditional Restaurants pay 25% of the standard rate
Papa Card Transaction and IVR Fees	Maximum - 2% of Papa Card redemption transactions, unless franchisor approves a higher rate
Cooperative Contributions	Minimum - 2% of Net Sales; cannot exceed 6% less the then-current Marketing Fund Contribution rate without majority vote of the Restaurants in the cooperative. As of 12/31/08, the highest contri¬bution rate was 4.5%. Non-Traditional Restaurants pay 25% of the co-op's contribution rate for standard Restaurants
Local Advertising	Minimum - 7% of Net Sales, less amounts contributed to the Marketing Fund and Cooperative
On-Site Installation and Support Fee	$1,000 for a standard 2-day installation, $500 per day for each additional day, plus franchisor’s reasonable travel, lodging and other expenses. Fee may be increased.
On-Site Support Fee	$250 per day plus franchisor’s reasonable travel, lodging and other expenses. Fee may be increased
Software Enhancement Fee	$41 per month.
Help Desk Service Fee	Flat fee of $70 per month or per call fee of $80 per hour with a 14 hour minimum.
Required Purchases	Will vary under circumstances

Date of FDD: 2009

The above information has been taken from the UFOC/FDD and online sources of Papa Johns.

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Papa Johns Franchise Cost & Fees

Papa Johns