Papa JohnsFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Papa Johns franchise requires a total initial investment of $111K – $853K, including a $25K franchise fee and an ongoing 5.0% royalty[2]. Per the 2025 FDD, average unit revenue was $1.2M[2]. SBA 7(a) loans show a 18.1% charge-off rate across 323 loans[1]. Verdict grade: B. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $111K – $853K
- 11th pct Service Resta…
- Avg gross sales
- $1.2M
- 39th pct Service Resta…
- Royalty
- 5.0%
- 13th pct Service Resta…
- Units
- 3,291
- 98th pct Service Resta…
- SBA default
- 18.1%
- system-wide median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = >15% above Quick-Service Restaurants avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Franchising since 1991. Systems this mature have refined operations and brand recognition.
Franchised units fell from 2752 to 2658 over 3 years. Investigate why operators are leaving.
Large franchise systems benefit from brand recognition, supply chain leverage, and proven operations.
Bottom line
- Total investment $111K – $853K including a $25K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $1.2M/year (median $1.1M).
- Verdict B (Above Average) with a risk score of 55/100. SBA loan charge-off rate of 18.1% across 323 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- Established system with 3,291 units across 35 years of franchising. Strong brand recognition and operational playbook.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Papa John's Franchising, LLC
- Parent company
- Papa John’s International, Inc.
- Ultimate parent
- Papa John's International, Inc.
- CEO title
- Chief Executive Officer and President
- Todd Penegor
- Incorporated in
- KY
- HQ
- 2002 Papa John’s Boulevard, Louisville, Kentucky 40299
- Auditor
- Ernst & Young LLP
- Audited financials
- Franchisor revenue
- $149K
- vs $143K 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).
Overview
About
Papa Johns franchisees operate pizza delivery and carryout locations, managing day-to-day food preparation, delivery logistics, customer service, and local marketing. Franchisees handle staffing, inventory management, and point-of-sale operations while adhering to Papa Johns' operational standards and paying 5% royalties on net sales.
- CEO
- Todd Penegor
- Headquarters
- KY
- Founded
- 1984
- FDD year
- 2025
- States available
- 50
FDD Item 7 · 2025 filing · 35 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 | |
| Initial Franchise Fee; Development Fee Deposit (Non-Traditional) | $5K | $5K | |
| GIS New Store Map Package (Non-Traditional) | $0 | $1K | |
| Total initial investment | $372K | $1.3M |
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.
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$127K
11.0% margin
Unlevered ROIC
25%
EBITDA / total invested capital
Payback
4.1 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $111K – $853K
- Better than avg vs category
- Liquid capital req'd
- $20K – $50K
- Near category avg vs category
- Franchise fee
- $5K – $25K
- Better than avg vs category
- Royalty
- 5.0%
- percentage · 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 gross sales |
| Marketing / ad fund | 6.0% of gross sales |
| Technology fee | $2 |
| Transfer fee | $4K |
| Renewal fee | $4K |
| Inventory (initial) | $4K – $15K |
| Total fee load | 13.0% of rev |
At 13.0% total fee load, roughly $150K per year goes to the franchisor before you pay a single operating expense.
Financial Performance
- Avg gross sales
- $1.2M
- Per unit, per year
- Median gross sales
- $1.1M
- Item 19 type
- net_sales
- Sample size
- 2878 units
- vs category median 28 · large
- Range (low → high)
- $292K→$3.3M
- Cohort dispersion (min → max)
- Quartile band
- $724K→$1.7M
- Bottom 25% → top 25%
- Transparency tier
- full
- Categorical assessment of disclosure depth
- Transparency
- 4 / 5
- vs category median 4 / 5 · typical
Compared against 453 Quick-Service Restaurants brands
vs Quick-Service Restaurants averages
How Papa Johns Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 3,291
- Opened
- 90
- Last reporting year
- Closed
- 26
- Turnover rate
- 0.8%
- Company-owned
- 539
- Corporate units in the system
- % franchised
- 84%
- vs corporate-owned
- Net growth (yr3)
- +2.3%
- Net unit change last year
- 3-yr CAGR
- +3.5%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 106
- 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 20 · 26 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
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%
- 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)
- 85.4%
- 5-yr charge-off
- 7.4%
- Loans approved 2021+
- Active lenders
- 121
- Defaults
- 42
Vintage analysis
Papa Johns charge-off rate by loan vintage
Explore lender portfolios on Bank Reports or regional data on State Reports.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
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)
Two cases: (1) Pach Food Services v. Papa John's USA (settled April 2016 for $30,000 regarding equipment lease dispute); (2) In Re Papa John's Employee and Franchisee Employee Antitrust Litigation (pending class action in Western District of Kentucky challenging no-poach provisions in franchise agreements)
Largest disclosed settlement: $30,000
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 55 / 100 rating
- 01MEDNet Income not disclosed in FDD Item 19 — unable to validate actual profitability claims against $1.16M average revenue
- 02MINORSlow unit growth of only 2.3% YoY indicates market saturation or franchisee underperformance in mature 3,291-unit system
- 03HIGHMultiple litigation settlements (equipment lease disputes, antitrust 'no-poach' violations, franchise termination breaches) suggest operational and contractual friction
- 04MINORWide investment range ($111K–$853K) creates uncertainty about true startup costs and capital requirements for different formats
- 05MED5% 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
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Radius |
| Protected territory | Yes |
| 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 |
| Mandatory arbitration | Yes |
| Arbitration location | Louisville, Kentucky |
| Jury trial waiver | Yes |
| Governing law | Kentucky |
| Litigation count | 3 |
View Item 3 litigation summary
Two cases: (1) Pach Food Services v. Papa John's USA (settled April 2016 for $30,000 regarding equipment lease dispute); (2) In Re Papa John's Employee and Franchisee Employee Antitrust Litigation (pending class action in Western District of Kentucky challenging no-poach provisions in franchise agreements)
Items 10, 11
Training & Operations
- Classroom training
- 150 hrs
- On-the-job training
- 346 hrs
- Training location
- On-site and corporate
- Ongoing training
- Required
- Franchisor financing
- Offered
- Item 10
- POS system
- Information System / Designated Software
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Information System / Designated Software
Item 20 · call current owners
Franchisee Contacts
54 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Papa Johns · FDD (2025) PDF
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 $111K – $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 $1.2M. The median is $1.1M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
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 B-grade franchise with a risk score of 55 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. 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.
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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.