Papa Johns Franchise Cost, Revenue & Review 2026
- Investment
- $261K – $853K
- Disclosed sales
- $1.1M
- gross sales, not profit
- SBA charge-off
- 18.1%
- on 323 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Papa Johns is a quick-service pizza chain positioned on better ingredients, built around delivery and carryout. Franchisees operate stores managing food prep, delivery logistics, staffing, and local marketing.
FranchiseVerdict summary · 2026
A Papa Johns franchise requires a total initial investment of $261K – $853K, including a $5K – $25K franchise fee and an ongoing 5.0% royalty[2]. Per the 2025 FDD, average unit revenue was $1.1M[2]. SBA 7(a) loans show a 18.1% charge-off rate across 323 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: 2025 filing · Data extracted: · Last cited check: · Staleness risk: medium - a newer filing may exist
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
- $261K – $853K
- 39th pct Service Resta…
- Avg gross sales
- $1.1M
- Net sales22nd pct Service Resta…
- Royalty
- 5.0%
- 12th pct Service Resta…
- Units
- 3,291
- 95th pct Service Resta…
- SBA charge-off
- 18.1%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-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 $261K – $853K including a $25K franchise fee, 5.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.1M/year (median $1.1M).
- RISKVerdict A (Strongest tier), verdict score 73/100 (higher is better). SBA loan charge-off rate of 18.1% across 323 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHPositive: net +63 franchised outlets in the latest year (90 opened, 27 closed) (Item 20).
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.
- FDD Item 1, page 6 of the 2025 FDD
- Predecessor
- Papa John's International, Inc.
- Prior franchisor entity
- CEO title
- Chief Executive Officer and President
- Todd Penegor
- Incorporated in
- Kentucky
- HQ
- 2002 Papa John's Boulevard, Louisville, Kentucky 40299
- Auditor
- Ernst & Young LLP
- Audited financials
- Franchisor revenue
- $143.2M
- vs $148.8M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Affiliated brands
- Capital Delivery
- PJ Food Service
Other brands the franchisor or its parent operates (Item 1).
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 2025 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
- CEO
- Todd Penegor
- Headquarters
- Kentucky
- Founded
- 2020
- FDD year
- 2025
- States available
- 50
Can you afford it, and what does the money buy?
Entry cost runs 15% above the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown18 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee; Development Fee Deposit | $5K | $25K | |
| GIS New Store Map Package | $1K | $1K | |
| Construction/Leasehold Improvements | $102K | $365K | |
| Furniture, Fixtures and Equipment | $77K | $239K | |
| Information System | $20K | $30K | |
| On-Site Support Fee | $3K | $3K | |
| On-Site Installation Fee | $2K | $5K | |
| Help Desk Service Fee | $240 | $240 | |
| Software Maintenance Fee | $1K | $1K | |
| Signage | $7K | $35K | |
| Test Fit Fee | $950 | $950 | |
| First Month's Rent | $3K | $9K | |
| Security Deposit and other deposits, Insurance Premium | $3K | $10K | |
| Opening Inventory and Supplies | $6K | $15K | |
| Opening Advertising | $5K | $10K | |
| Training Expenses | $1K | $30K | |
| Miscellaneous Opening Costs | $5K | $25K | |
| Additional Funds - 3 months | $20K | $50K | |
| Total initial investment | $261K | $853K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $261K – $853K
- 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%
- typical 6–8%
- Ad fund
- 6.0%
- typical 3–5%
- Total fee load
- 13.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of net sales |
| Marketing / ad fund | 6.0% of net sales |
| Technology fee | $375 |
| Training fee | $150 |
| Transfer fee | $4K |
| Renewal fee | $4K |
| Inventory (initial) | $6K – $15K |
| Total fee load | 13.0% of rev |
At 13.0% total fee load, roughly $146K per year goes to the franchisor before you pay a single operating expense.
What do units actually make?
Average unit sales run 15% above the quick-service restaurants norm.
Reported as net sales, not gross sales
Source: FDD 2025 · 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 Johns 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
$592K
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 Johns 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: 2025 FDD
Financial Performance
Reported as net sales, not gross sales
- 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
- historical sales
- Sample size
- 2,365 outlets
- vs category median 19 · large
- Range (low → high)
- $292K→$3.1MCited, not corroborated — printed on page 74 of the 2025 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
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 781 Quick-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: 2.0x.
Fee burden
Total ongoing fee load of 13.0% — above the Quick-Service Restaurants median of 7.5%.
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System roughly stable (+3.5% 3-year CAGR) with 3,291 units.
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 Quick-Service Restaurants medians
How Papa Johns Compares
Category median of published Quick-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 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 3,291
- Opened
- 90
- Last reporting year
- Closed
- 27
- Turnover rate
- 0.8%
- Company-owned
- 539
- Corporate units in the system
- % franchised
- 84%
- vs corporate-owned
- Net growth (3-yr)
- +3.5%
- Net unit change over 3 years
- 3-yr CAGR
- +3.5%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Reacquired
- 1
- Franchisor bought back
- Projected new
- 81
- Franchisor's next-year forecast
- Transfer rate
- 3.2%
- Owners selling to other franchisees
- Continuity rate
- 99.0%
- Units that stayed open
- Ceased ops
- 0.8%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 50 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
50
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 323
- Loan volume
- $104.8M
- Median loan
- $300K
- 50th percentile
- Charge-off rate
- 18.1%
- on 323 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)
- 81.9%
- 5-yr charge-off
- 7.4%
- Loans approved 2021+
- Active lenders
- 121
- Defaults
- 42
- Typical loan rate
- 7.6%
- avg rate to borrowers
- vs industry
- N/A
- NAICS 7225
- Jobs supported
- 2,691
- 6.8 per loan
- Lender concentration
- 14%
- top lender's share
Borrower mix: 0% went to startups / new businesses, 100% to established operators
Vintage analysis
Papa Johns charge-off rate by loan vintage
Top lenders financing Papa Johns franchisees
Showing 3 of 121 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.
What could kill this investment?
SBA loans charge off at 18.1% — 13% 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
Papa Johns presents moderate-to-cautionary risk: disclosed litigation history and absent profitability data (Item 19) prevent validation of returns, while sluggish 2.3% unit growth suggests market maturity challenges despite strong brand recognition.
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
Pach Food Services v. Papa John's USA (settled $30,000, 2016); In Re Papa John's Employee and Franchisee Employee Antitrust Litigation (settled $5.0 million, 2022); I&R Foods LLC v. PJI (settled $10,000, 2025)
Largest disclosed settlement: $5,000,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Ernst & Young LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 73 / 100 verdict
- 01MINORSlow unit growth of only 2.3% YoY indicates market saturation or franchisee underperformance in mature 3,291-unit system
- 02HIGHMultiple litigation settlements (equipment lease disputes, antitrust 'no-poach' violations, franchise termination breaches) suggest operational and contractual friction
- 03MED5% royalty on net sales is standard but combined with undisclosed profitability makes ROI calculation impossible
Severity inferred from the FDD text · not a regulatory classification
Litigation case detail3 matters · Item 3
Litigation cases
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. and Papa John’s USA, Inc. · filed 2019-02-19 · 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 District Court for the Western District of Kentucky, Case No.: 3:18-CV-00825-JHM-RSE. On February 19, 2019, Plaintiffs filed a Consolidated Amended Complaint asserting a class action for violation of the Sherman Antitrust Act.”Page 12 of the 2025 FDD, Item 3
Outcome:“On April 14, 2022, the parties reached a settlement in principle to resolve the case.”
Concluded (2)
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 · CVRI2304549
“I&R Foods LLC v. Papa John’s International, Inc., Superior Court of California, County of Riverside, 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 2025 FDD, Item 3
Outcome:“The Superior Court of California dismissed the case on March 13, 2024.”
Pach Food Services, LLC v. Papa John’s USA, Inc.
settledBrought by a franchisee · Papa John’s USA, Inc. · filed 2015 · Superior Court of New Jersey, Bergen County Division · 2:15-CV-05525-MCA-LDW
“Pach Food Services, LLC v. Papa John’s USA, Inc., Superior Court of New Jersey, Bergen County Division, case number 2:15-CV-05525-MCA-LDW. In May 2015, Pach Food Services, a former Papa Johns franchisee, filed suit against our affiliate, Papa John’s USA, Inc. The plaintiff opened a Papa Johns Restaurant under an incentive program that included a lease of certain Restaurant equipment.”Page 12 of the 2025 FDD, Item 3
Outcome:“In April 2016, the parties settled the case. The settlement’s material term was a payment to Pach Food Services of $30,000.”
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 13.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 1 mi |
| Online sales rightsℹ | Restricted |
| 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 |
| Termination notice | 30 days |
| Termination groundsℹ | 2 |
| Curable defaultsℹ | 1 |
| Mandatory arbitration | Yes |
| Arbitration location | Louisville, Kentucky |
| Jury trial waiver | No |
| Governing law | Kentucky |
| Litigation count | 3 |
View Item 3 litigation summary
Pach Food Services v. Papa John's USA (settled $30,000, 2016); In Re Papa John's Employee and Franchisee Employee Antitrust Litigation (settled $5.0 million, 2022); I&R Foods LLC v. PJI (settled $10,000, 2025)
Items 10, 11
Training & Operations
- Classroom training
- 149 hrs
- On-the-job training
- 348 hrs
- Training location
- Approved company-owned or franchised certified training Restaurant; Papa Johns University (PJU) for 1 week
- Ongoing training
- Required
- Site selection
- Franchisor must approve all sites
- Franchisor financing
- Offered
- Item 10
- POS system
- Papa Johns Information System (Designated Software)
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Papa Johns Information System (Designated Software)
Item 20 · call current owners
Franchisee Contacts
57 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Papa Johns franchise?
The total investment to open a Papa Johns franchise ranges from $261K – $853K, 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 Johns franchise owners earn?
According to Item 19 of the Papa Johns FDD, the average gross sales per unit is $1.1M. The median is $1.1M. Important context: Reported as net sales, not gross sales. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Papa Johns?
Papa Johns is franchised by Papa John's Franchising, LLC. Its parent company is Papa John's International, Inc.. Source: FDD Item 1, 2025 filing.
What is Item 19 in the Papa Johns 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 Johns FDD and qualifies whose outlets they describe.
What is Papa Johns's franchise failure rate?
Based on SBA 7(a) loan data, Papa Johns has a charge-off rate of 18.1% across 323 loans, meaning 18.1% 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 Johns franchise locations are there?
As of their most recent FDD filing, Papa Johns has 3,291 total units in the United States, including 2,752 franchised units and 539 company-owned units. 90 new units were opened in the latest reporting year.
Is Papa Johns a good franchise to buy?
FranchiseVerdict rates Papa Johns as a A-grade franchise with a verdict score of 73 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.