Papa John’s

From the pages of Restaurant Franchising
At Papa John’s, quality is 1 and “Better Ingredients. Better Pizza.” makes for better franchise opportunities

Papa John’s franchise

“Our success is based on the fact that we select exceptional individuals to come into our system and be our franchisees,” says Don Graham, vice president, development at Papa John’s International, Inc.

Of course, while true, the equation is not that simple, either. Papa John’s International provides ongoing support in site selection, construction phases, best business practices, equipment sourcing, and, after the stores are open, a strong supply chain and operational support.

“Our restaurants always have fresh dough. We make deliveries twice a week from our 10 strategically placed Quality Control Centers—it’s quality that makes for great food,” says Graham.

Papa John’s has embraced technology, as well, and that goes a long way towards supporting the franchisees, whether it’s through online ordering helping to increase sales or the monthly webcasts or through “Papa Link,” a system that opens, online, all the manuals that a franchisee needs to access for current information and for ongoing e-learning for the franchisees. All this in addition to PJU (Papa John’s University), which brings seasoned franchisees back to corporate for on-site training updates.

Interested franchisees need to have a net worth of $150,000 and $50,000 liquid assets (per restaurant) and the ability to secure financing for future growth, says Graham.

Franchisees come to Papa John’s corporate campus in Louisville, Kentucky, for a 1½-day guest visit and an introduction to the support teams and overall corporate culture. If they choose to move forward and a development agreement is signed, evaluation of the trade area and site selection are part of the support.

The operating partner participates in five weeks of training in the field and one week at the corporate campus (Papa John’s also offers a level of training for operators moving up to multi-unit status). Field training has operators working all shifts, managing P&Ls, store operations, ordering, and HR.

Out of 3,500 stores (2,800 domestic and 700 international), 600 are corporate owned, and that benefits the entire brand. “When we negotiate equipment and sign agreements with supply partners, anything we buy at the corporate level, we make the same pricing available to our franchisees,” says Graham.

Franchisees also participate in company decisions through the Franchisee Advisory Council, which is a collaborative alliance encompassing marketing and operations. There are 12 members representing all the regions of the country.

And while the past year and a half has held some challenges, incentives have helped.

“For our 2009 25th Anniversary Development Incentive, we offered an opportunity with no franchise fee, no royalties, and a $10,000 cash award at opening, and that helped us during the economic downturn. For the average franchisee, those incentives represent a $70,000 savings the first year,” says Graham.

“In 2010, we’ve sweetened the deal a bit. Still no franchise fee, the royalties are reduced, and we’ve thrown in a set of Middleby Marshall WOW double ovens (a $30,000 value). It’s a $70,000-plus value, and the sooner the restaurants are open, the greater the royalty reduction for the franchisee.

“In addition, we introduced a Small Town Initiative to reach out to smaller communities who previously haven’t been able to support the delivery concept. It’s providing opportunity for 1,000 additional stores,” says Graham. He adds, “Growth is also strong for non-traditional locations on university and college campuses.”

The incentives have worked. The company is ahead of forecast for openings, and Graham says the interest in the brand has been incredible.

And it all comes back to quality. “It’s the quality in everything we do, good franchisees, and a strong will to succeed by doing things the right way,” says Graham.

Better Ingredients do make Better Pizzas.

For more information about franchising opportunities with Papa John’s, visit company.papajohns.com/franchise_opps