QSR 50 | August 2012 | By Kevin Hardy
The Pizza Prodigy
“We think there’s no reason this can’t be a national brand and there’ll be a Papa Murphy’s in every market,” he says.
The typical franchisee runs two stores. King says franchisees usually come to Papa Murphy’s because of its low investment—it costs between $250,000 and $275,000 to open a new store—and the simple, unique concept.
Franchisees also enjoy a high quality of life because of shorter hours. Plus, a lot less can go wrong when there are no ovens, cooks, or drivers.
“A lot of people’s first reaction to the brand is, ‘Wow, a pizza place without ovens? That’s kind of weird,’” King says. “But so many of our franchisees come to us because they were customers. They know it and love it.”
As long as people are willing to eat at home, King sees a limitless future for the brand. And the economic downturn has provided even more opportunities for Papa Murphy’s.
“I think we are trying to take advantage of the current environment for both availability of real estate and growing a business in softer economic times with a brand that’s perfectly suited to take advantage of those opportunities,” he says. “We’re going to continue to push that during this period of time and grow as fast as we can as long as we do it well.”
Outside of the West Coast, Papa Murphy’s has had success in cities like Denver, Salt Lake City, and Green Bay, Wisconsin. The Dallas, Houston, and Phoenix markets have also proved lucrative.
Much of the Southeast and East Coast remains largely undeveloped by Papa Murphy’s, and that will continue, at least in the short term. The company will focus growth over the next few years in 14 markets, markets that aren’t new for Papa Murphy’s, but where the company hopes to establish a better presence before moving on.
In that sense, the CEO sees Papa Murphy’s as being similar to Chick-fil-A and In-N-Out Burger, both of which, he says, have marketing strategies that aren’t in your face and rely heavily on customer satisfaction and word of mouth like Papa Murphy’s.
Those brands each have loyal customers, though Chick-fil-A operates primarily in the Southeast and In-N-Out in the Southwest.
“We’re a lot like that,” Calwell says. “For the people that know about us, it’s a very loyal brand.”
Calwell has worked in the pizza segment for 17 years, including time at Pizza Hut and Domino’s. Aside from strategizing growth, he has his eye on improving store-level profitability and per-square-foot profit margins.
Much of that will hinge on new product development. Calwell says he’s placed a heavier emphasis on the creation and testing of new products since coming on board. Aside from pizza, the brand offers side items like cheesy bread and salads and desserts like cookie dough and cinnamon wheels. It recently launched its Mini Murph, a do-it-yourself pizza kit for kids.
“We’re focused on getting a good, robust new product pipeline,” Calwell says.
Using freshness, healthy options, and overall value and quality leverage gets Papa Murphy’s a wider audience than just the price-minded consumer looking for the best deal. Though executives say it can still compete for the value-minded consumer, its audience has always been broader than the typical young, male pizza consumer, Calwell says.
Papa Murphy‘s Timeline
1981 Papa Aldo's Pizza founded in Hillsboro, Oregon, by Bob Graham.
1984 Murphy's Pizza founded in Petaluma, California, by Terry Collins.
1995 Papa Murphy's International founded by Terry Collins and Bob Graham as a merger between Papa Aldo's Pizza and Murphy's Pizza. It becomes a privately held corporation with headquarters in Vancouver, Washington.
1997 Papa Murphy's launches its Stuffed pizza line.
2004 PMI Holdings Inc., based in Delaware, merges with Papa Murphy's International. During the partnership with the private equity investment firm, Papa Murphy's sees its domestic system-wide sales increase by more than 63 percent.
2004 Papa Murphy's launches its deLITE pizza line with less carbs and less calories.
2006 Opens first Canada store.
2008 1,000th store opens in San Antonio.
2010 Papa Murphy's sold to Lee Equity Partners, positioning the company for its next phase of growth as it continues to seek new franchise owners and open locations, primarily in the Southwestern and Southeastern U.S.
2011 Named "#1 Rated Pizza Chain" by consumers for a second consecutive year by Zagat's Fast Food Survey.
2012 Launches the Mini Murph Make 'N' Bake Pizza Kit, a culinary create-at-home kit for kids.
“Our consumer is much more the family, more loyal and more thoughtful,” he says.
Papa Murphy’s scores the highest among pizza chains on Technomic’s Consumer Restaurant Brand Metrics program. The company gets the highest score on 27 of 50 attributes measured, including those for food quality, portion for price paid, menu variety, and takeout.
On all of the customer service–related attributes, Papa Murphy’s takes the lead.
“They’re kind of hitting on all cylinders. It’s not like they’re just really high in value. They get really high scores there, but they also get great scores on having an excellent corporate reputation. They have success in a number of areas,” says Mary Chapman, director of product innovation for Technomic. “They score amazingly high among their pizza chain peers, but also among limited-service concepts.”
That’s validated by Papa Murphy’s many accolades, including being named Zagat No. 1 Rated Pizza Chain in 2010 and 2011, and Top 100 Food and Beverage company by Inc. Magazine from 2007 to 2009.
Aside from high scores on value and quality, Technomic data shows that Papa Murphy’s customers ranked it the highest of pizza chains for reputation. It also scores high on categories that judge a store’s welcome and comfortable atmosphere, even though customers don’t actually dine in.
“They’re executing everywhere,” Chapman says. “They’re executing everywhere they need to execute, according to their own customers.”
Brand identity is important for any product, and Papa Murphy’s is no exception. But it’s sometimes hard to define exactly what the chain is. Papa Murphy’s is first and foremost pizza, but by operating outside conventional structures, the brand has, in essence, created an entirely new market segment.
“People a lot of the time liken us to Pizza Hut, Domino’s, or whatever. Other people will say, ‘You’re more of a convenience store,’” Calwell says. “I don’t think we’re either. I think we are clearly pizza-focused. But we’re all about fresh, high-quality food—higher quality than our competitors. And we’re all about doing that for a good value.”
And as long as it does that, Calwell says, there’s no reason Papa Murphy’s can’t compete on a national level with the best in the pizza business.
“I definitely believe there’s room for a Papa Murphy’s in every neighborhood,” he says.
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