Papa John's Pizza Franchise Cost, Revenue & Review 2026
- Investment
- $281K – $890K
- Disclosed sales
- $1.1M
- gross sales, not profit
- SBA charge-off
- 19.6%
- on 190 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
FranchiseVerdict summary · 2026
A Papa John's Pizza franchise requires a total initial investment of $281K – $890K, including a $5K – $25K franchise fee and an ongoing 5.0% royalty[2]. Per the 2026 FDD, average unit revenue was $1.1M[2]. SBA 7(a) loans show a 19.6% charge-off rate across 190 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: 2026 filing · Data extracted: · Last cited check: · Staleness risk: low - the current year's filing
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored7 of 8 headline figures on this page cite a page of the filing; the rest are marked “Not cited” beside the figure.
Overview
- Investment
- $281K – $890K
- 11th pct Service Resta…
- Avg gross sales
- $1.1M
- Incl. company outletsPartial period5th pct Service Resta…
- Royalty
- 5.0%
- 8th pct Service Resta…
- Units
- 3,294
- 38th pct Service Resta…
- SBA charge-off
- 19.6%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Full-Service Restaurants median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $281K – $890K including a $25K franchise fee, 5.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.1M/year (median $1.1M) (includes company-owned outlets).
- RISKVerdict A (Strongest tier), verdict score 71/100 (higher is better). SBA loan charge-off rate of 19.6% across 190 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHPositive: net +80 franchised outlets in the latest year (162 opened, 82 closed) (Item 20).
- TERMSNo protected territory and the franchisor reserves the right to compete in your area. Clarify territorial boundaries before signing.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Papa John's Franchising, LLC
- Parent company
- Papa John's International, Inc. (PJI)
- FDD Item 1, page 6 of the 2026 FDD
- Ultimate parent
- Papa John's International, Inc.
- FDD Item 1, page 6 of the 2026 FDD
- Predecessor
- Papa John's International, Inc.
- Prior franchisor entity
- CEO title
- Chief Executive Officer of PJI and President of Papa Johns
- Todd Penegor
- Incorporated in
- Kentucky
- HQ
- 2002 Papa John's Boulevard, Louisville, Kentucky 40299
Same owner · FDD Item 1, page 6
1 other brand on this site name Papa John's International, Inc. as parent or ultimate parent in their own FDD.
Grouped by the owner's name as each filing prints it (this page: the 2026 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
Operation of a quick service restaurant specializing in pizza and limited additional menu items under the name "Papa Johns," offered as Standard, Small-Town, or Non-Traditional Restaurants, primarily delivery and carry-out.
- CEO
- Todd Penegor
- Headquarters
- Kentucky
- Founded
- 2020
- FDD year
- 2026
Can you afford it, and what does the money buy?
Entry cost runs 14% below the typical full-service restaurants franchise.
Source: FDD 2026 · Items 5–7
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $25K | $25K |
| Working capital (3–6 mo) | $20K | $50K |
| Equipment, build-out, other | $236K | $815K |
| Total initial investment | $281K | $890K |
Source: Papa John's Pizza 2026 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $281K – $890K
- Top 40% of category vs category
- Liquid capital req'd
- $20K – $50K
- Top 40% of category vs category
- Franchise fee
- $5K – $25K
- Top 40% of category vs category
- Royalty
- 5.0%
- Tiered by sales volume · typical 6–8%
- Ad fund
- 6.0%currently 1.50%
- typical 3–5%
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 6.0% of net sales |
| Technology fee | $375 |
| Training fee | $150 |
| Transfer fee | $4K |
| Renewal fee | $4K |
What do units actually make?
Average unit sales run 30% below the full-service restaurants norm.
Includes company-owned outlets
Covers a partial period, not a full year
Source: FDD 2026 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Papa John's Pizza until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$621K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Papa John's Pizza unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2026 FDD
Financial Performance
Includes company-owned outlets
Covers a partial period, not a full year
- Avg gross sales
- $1.1M
- Per unit, per year
- Median gross sales
- $1.1M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- partial-period revenue
- Sample size
- 2,837 outlets
- vs category median 18 · large
- Range (low → high)
- $266K→$3.5MCited, not corroborated — printed on page 71 of the 2026 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Quartile band
- $697K→$1.6M
- Bottom 25% → top 25%
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
Compared against 801 Full-Service Restaurants brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $1.1M/year in gross sales. Revenue-to-investment ratio: 1.9x. Includes company-owned outlets.
Fee burden
5.0% royalty + 6.0% ad fund.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Full-Service Restaurants medians
How Papa John's Pizza Compares
Category median of published Full-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 3,294
- Opened
- 162
- Last reporting year
- Closed
- 82
- Turnover rate
- 2.5%
- Company-owned
- 462
- Corporate units in the system
- % franchised
- 86%
- vs corporate-owned
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 190
- Loan volume
- $51.8M
- Median loan
- $203K
- 50th percentile
- Charge-off rate
- 19.6%
- on 190 loans · rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 80.4%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 91
- Defaults
- 36
- Typical loan rate
- 6.0%
- avg rate to borrowers
- vs industry
- N/A
- NAICS 7222
- Jobs supported
- 4,787
- 9.2 per loan
- Lender concentration
- 8%
- top lender's share
Borrower mix: 33% went to startups / new businesses, 67% to established operators
Vintage analysis
Papa John's Pizza charge-off rate by loan vintage
Top lenders financing Papa John's Pizza franchisees
Showing 3 of 91 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Papa John's Pizza from SBA 7(a) FOIA data.
- Principal loss rate
- 17.8%
- Avg SBA guarantee
- 74%
- Avg interest rate
- 6.05%
- Avg chargeoff amount
- $256K
- Lender concentration
- 7.9%
- Job velocity
- 9.2 per $100K
- Jobs supported
- 4,787
Top SBA lendersTop lender holds 8% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | 15 | N/A | N/A | |
| 2 | 15 | N/A | N/A | |
| 3 | 13 | N/A | N/A | |
| 4 | 12 | N/A | N/A | |
| 5 | 9 | N/A | N/A |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| NJNew Jersey | 20 | 7 | 35.0% |
| CACalifornia | 16 | 6 | 42.9% |
| TXTexas | 16 | 2 | 12.5% |
| ILIllinois | 15 | 1 | 6.7% |
| NYNew York | 13 | 4 | 30.8% |
| MIMichigan | 11 | 1 | 9.1% |
| PAPennsylvania | 11 | 1 | 9.1% |
| KYKentucky | 7 | 0 | 0.0% |
| OHOhio | 7 | 0 | 0.0% |
| AZArizona | 5 | 2 | 40.0% |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
What could kill this investment?
SBA loans charge off at 19.6% — 22% above the 16.0% national norm, i.e. higher lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
Antitrust class action re no-poach clause (settled, $5M aggregate, partial payment made); former franchisee breach of contract/wrongful termination suit compelled to arbitration (settled for $10,000); pending arbitration by minority shareholder alleging wrongful termination and breach of contract.
Largest disclosed settlement: $5,000,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: Yes
Litigation case detail3 matters · Item 3
Litigation cases
The franchisor
Pending (1)
Keshav Ranjan, Kaytee Pizza NY Inc. v Papa John’s Franchising, LLC, Papa John’s International, Inc.
pendingBrought by a franchisee · filed 2025-09-08 · American Arbitration Association · 01-25-0004-5686
“Keshav Ranjan, Kaytee Pizza NY Inc. v Papa John’s Franchising, LLC, Papa John’s International, Inc., Case No. 01-25-0004-5686. On September 8, 2025, Keshav Ranjan, a minority shareholder of a Kaytee Pizza NY Inc. (“Kaytee”), a Papa John’s franchisee, filed a demand for arbitration against Papa John’s Franchising, LLC and Papa John’s International, Inc. (collectively “PJI”)”Page 13 of the 2026 FDD, Item 3
Outcome:“We continue to deny any liability or wrongdoing in this matter, believe the allegations to be meritless, and are defending vigorously.”
Parent, affiliates and predecessor
Pending (1)
In Re Papa John’s Employee and Franchisee Employee Antitrust Litigation
pendingThird-party plaintiff · Papa John’s International, Inc. (PJI), printed as 'the Company' · filed 2018 · United States District Court for the Western District of Kentucky · 3:18-CV-00825-JHM-RSE
“In Re Papa John’s Employee and Franchisee Employee Antitrust Litigation, United States Dis- trict Court for the Western District of Kentucky, Case No.: 3:18-CV-00825-JHM-RSE. In re Papa John’s Employee & Franchise Employee Antitrust Litigation is a putative class action filed in December 2018 in the United States District Court for the Western District of Kentucky. The suit alleges”Page 12 of the 2026 FDD, Item 3
Outcome:“On April 14, 2022, the parties reached a settlement in principle to resolve the case. Pursuant to the terms of the proposed settlement, in exchange for the Company’s payment of a total aggregate settlement amount of $5.0 million and other non-monetary consideration, all claims in the action will be dismissed”
Concluded (1)
I&R Foods LLC v. Papa John’s International, Inc.
settledBrought by a franchisee · Papa John’s International, Inc. (PJI), “our parent and predecessor” · filed 2023-08-30 · Superior Court of California, County of Riverside (compelled to arbitration) · CVRI2304549
“I&R Foods LLC v. Papa John’s International, Inc., Superior Court of California, County of Riv- erside, Case No. CVRI2304549. On August 30, 2023, I&R Foods LLC (“I&R Foods”), a former Papa Johns franchisee, filed a Complaint against our parent and predecessor, PJI.”Page 13 of the 2026 FDD, Item 3
Outcome:“In March 2025 the parties entered into a confidential settlement agreement and mutual release under which, without admis- sion of wrongdoing, PJI agreed to pay $10,000, and the parties agreed to mutual releases and dismissal of all claims in arbitration.”
Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.
What are you signing up for?
Ongoing fees run about 11.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Territory type | No territory protection |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Territory radius | 1 mi |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Mandatory arbitration | Yes |
| Arbitration location | Louisville, Kentucky |
| Governing law | Kentucky |
| Litigation count | 3 |
View Item 3 litigation summary
Antitrust class action re no-poach clause (settled, $5M aggregate, partial payment made); former franchisee breach of contract/wrongful termination suit compelled to arbitration (settled for $10,000); pending arbitration by minority shareholder alleging wrongful termination and breach of contract.
Items 10, 11
Training & Operations
- Training location
- On-the-job training primarily at certified training Restaurants; classroom instruction; one week at PJU (Papa Johns University)
- Ongoing training
- Required
- Site selection
- Franchisor approves sites; PJ USA affiliate provides site selection support
- Franchisor financing
- Offered
- Item 10
- POS system
- Information System (Designated Software)
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Information System (Designated Software)
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Papa John's Pizza franchise?
The total investment to open a Papa John's Pizza franchise ranges from $281K – $890K, with an initial franchise fee of $25K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Papa John's Pizza franchise owners earn?
According to Item 19 of the Papa John's Pizza FDD, the average gross sales per unit is $1.1M. The median is $1.1M. Important context: Includes company-owned outlets; Covers a partial period, not a full year. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Papa John's Pizza?
Papa John's Pizza is franchised by Papa John's Franchising, LLC. Its parent company is Papa John's International, Inc. (PJI). The ultimate parent named in the FDD is Papa John's International, Inc.. Source: FDD Item 1, 2026 filing.
What is Item 19 in the Papa John's Pizza FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Papa John's Pizza FDD and qualifies whose outlets they describe.
What is Papa John's Pizza's franchise failure rate?
Based on SBA 7(a) loan data, Papa John's Pizza has a charge-off rate of 19.6% across 190 loans, meaning 19.6% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Papa John's Pizza franchise locations are there?
As of their most recent FDD filing, Papa John's Pizza has 3,294 total units in the United States, including 2,832 franchised units and 462 company-owned units. 162 new units were opened in the latest reporting year.
Is Papa John's Pizza a good franchise to buy?
FranchiseVerdict rates Papa John's Pizza as a A-grade franchise with a verdict score of 71 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.