Bottom line
- Total investment $367K – $670K including a $25K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $681K/year (median $613K).
- Rated STRONG with a risk score of 52/100. SBA loan default rate of 0.0% across 133 loans (below the industry average).
- System contracting at -7.7% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Papa Murphy's unit return on the cash you put in?
Unlevered ROIC · per unit
14%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Papa Murphy's units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$544K
on $2.7M purchase
Total debt
$2.2M
SBA $1.4M + senior + seller note
Overview
About
Papa Murphy's franchisees operate take-and-bake pizza locations where customers select ingredients and watch pizza preparation before taking it home to bake. Daily operations include dough preparation, ingredient management, customer order fulfillment, packaging, and maintaining food safety standards in a limited-service format with no on-site dining.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 18 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 phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Papa Murphy's presents elevated risk due to shrinking franchise system, undisclosed profitability metrics, history of litigation regarding franchisee obligations, and unprotected territory exposure.
Score breakdown · what drove the 52 / 100 rating
- 01MINORUnit count declining 2.3% YoY (1127 units) indicates system contraction and potential market saturation or operational challenges
- 02HIGHMultiple settled litigation cases involving misrepresentations and marketing obligations suggest compliance issues and franchisee disputes
- 03MINORNo average net income disclosure (Item 19) prevents assessment of actual profitability relative to $367-670K investment
- 04MINORUnprotected territory creates direct competition risk from other franchisees and corporate-owned locations in same area
- 05MINOR5% royalty on top of operating costs with declining unit economics may pressure franchisee margins
- 06MINORHigh investment range ($303K spread) with declining units raises questions about ROI and break-even timeline
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
97 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Papa Murphy's · FDD (2024) PDF