Papa Romano's
Date Incorporation: 1969
Franchising Since: 1985
Headquarters: Michigan
Description: The Papa Romano's single unit franchise is a retail quick service restaurant business that specializes in pizza and Italian prepared foods and other prepared foods for carry-out, delivery and dine-in.
Franchise Offer: The franchisor offers a Papa Romano's single unit franchise, an area development franchise and an area representative franchise.
The traditional store single unit franchise will operate a retail quick service restaurant business for carry-out and delivery and dine-in. The non-traditional store single unit franchise will be located in non-traditional locations and will offer a limited menu and/or services. The area developer will agree to operate a number of single unit franchises in a specified territory. The area representative will operate at least one single unit franchise and must sell and service single unit franchises in a specified territory.
Financial Assistance: The franchisor does not offer direct or indirect financing. At the franchisee's request, Papa Romano's may provide information and advice to assist in seeking financing.
Training and Assistance: The franchisor will provide an initial training program to train the franchisee to operate the franchise business. The training will be provided to up to two persons without charge. Currently, the initial training program for traditional stores consists of approximately 156-208 hours of on-the-job training and approximately 1-2 weeks of follow-up training in the franchisee's store. The initial training program for non traditional stores will be approximately 156-208 hours of on-the-job training, and approximately 1-2 weeks of follow-up training in the franchisee's store.
If the franchisee pays the initial advertising fee, the franchisor will provide initial advertising and grand opening promotions. The franchisor will also provide a representative to assist in the opening of the franchise business for a time period which will not exceed 14 days.
Territory: Except for the limited rights granted to the franchisee in their territory, the franchisee will not receive an exclusive territory. Except under certain conditions, the franchisor will not open or authorize any other person to locate a traditional store operated under the franchise marks and franchise system in the franchisee's territory. If the franchise is for a traditional store, the territory will generally be the area that is within a two and one-half mile radius from the front door of the franchise location. If the franchise is for a non-traditional store, the territory will typically be all or a portion of the property boundaries of the particular building or establishment in which the store is located (e.g. a stadium or an airport).
Term of Agreement and Renewal: The term of the franchise agreement is 10 years and can be renewed for 2 consecutive options of 5 years each.
Obligations and Restrictions: The franchisee, or (if it is a corporation, partnership, limited liability company or other entity) at least a designated owner must: (a) devote his or her full time and effort to the day-to-day active management and operation of the franchise business; (b) personally exercise his or her best efforts to market the franchise business and maximize customer satisfaction; (c) preserve and exercise ultimate authority and responsibility with respect to the management and operation of the franchise business; and (d) represent and act on behalf of franchisee in all dealings with the franchisor. Each designated owner must have an ownership interest in franchisee.
The area development agreement does not authorize an area developer to operate a store.
An area representative must be personally involved in the conduct and operation of the area representative franchise. However the area representative agreement does not authorize the area representative to operate a single unit franchise. The franchisee must only sell products or services approved by the franchisor. The franchisee must sell all products and provide all services specified for sale for the franchise business.
Total Number of Units: 49 units by year end 2007
Total Number of franchises Units: 47 units by year end 2007
Investment Tables:
Initial Investment:
Traditional store (1,000 to 2,500 sq. feet)
| Expenditures | Low | High |
|---|---|---|
| Franchise fee | $25,000 | $25,000 |
| Initial advertising fee | $5,000 | $5,000 |
| Lease deposit and initial payments | $3,000 | $14,800 |
| Architectural and/or engineering fee | $3,000 | $6,500 |
| Leasehold improvements | $35,000 | $105,000 |
| Fixtures, furniture, equipment, signs and decoration | $70,000 | $120,000 |
| Insurance | $6,000 | $13,000 |
| Costs incurred while training | $0 | $5,000 |
| Opening inventory | $3,000 | $6,000 |
| Computer POS system | $10,500 | $18,000 |
| Miscellaneous pre-opening expenses | $1,000 | $5,000 |
| Additional funds (3 months) | $18,000 | $25,000 |
| Total | $179,500 | $348,300 |
Non-traditional store (400 to 1,000 sq. feet)
| Expenditures | Low | High |
|---|---|---|
| Franchise fee | $15,000 | $15,000 |
| Initial advertising fee | N/A | |
| Lease deposit and initial payments | $1,700 | $7,500 |
| Architectural and/or engineering fee | $3,000 | $5,000 |
| Leasehold improvements | $35,000 | $70,000 |
| Fixtures, furniture, equipment, signs and decoration | $43,000 | $75,000 |
| Insurance | $6,000 | $13,000 |
| Costs incurred while training | $0 | $5,000 |
| Opening inventory | $3,000 | $5,000 |
| Computer POS system | $10,500 | $18,000 |
| Miscellaneous pre-opening expenses | $1,000 | $5,000 |
| Additional funds (3 months) | $12,000 | $25,000 |
| Total | $130,200 | $243,500 |
Ongoing fees:
| Name of Fee | Amount |
|---|---|
| Royalty fee | A weekly payment equal to the greater of: $125; or (a) 3% of gross sales during the 1st year of operation; (b) 4% of gross sales during the 2nd year of operation; and (c) 5% of gross sales after the 2nd year of operation |
| Advertising fund contribution | 5% of gross sales |
| Cooperative advertising | May vary |
| Renewal fee | $2,000 |
| POS support system agreement | $1,200 to $2,100 annually |
| Centralized e-mail system fee (if applicable) | To be determined |
| Gift card, e-card or frequency card program fees | To be determined |
| Refurbishing costs | Varies |
The above information has been taken from the UFOC/FDD of Papa Romano's
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