Papa Murphy's Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Papa Murphy's is a take-and-bake pizza franchise: customers buy fresh, uncooked pizzas to bake at home, plus salads and desserts. Franchisees run stores assembling made-to-order pizzas, with no dine-in or delivery kitchen.
FranchiseVerdict summary · 2026
A Papa Murphy's franchise requires a total initial investment of $450K – $693K, including a $15K – $25K franchise fee and an ongoing 5.0% royalty[2]. Per the 2026 FDD, average unit revenue was $688K[2]. SBA 7(a) loans show a 9.3% charge-off rate across 119 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $450K – $693K
- 71st pct Service Resta…
- Avg gross sales
- $688K
- Net sales10th pct Service Resta…
- Royalty
- 5.0%
- 12th pct Service Resta…
- Units
- 1,014
- 92nd pct Service Resta…
- SBA charge-off
- 9.3%
- % 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 avg · 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 $450K – $693K including a $25K franchise fee, 5.0% ongoing royalty.
- RETURNSAverage unit revenue of $688K/year (median $618K).
- RISKVerdict A (Strongest tier), verdict score 73/100 (higher is better). SBA loan charge-off rate of 9.3% across 119 loans (near or below the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- FLAGBankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Papa Murphy's International LLC
- Parent company
- MTY Franchising USA, Inc.
- Ultimate parent
- MTY Food Group Inc.
- Predecessor
- Papa Aldo's International, Inc. / Comurphyco Franchise Corporation
- Prior franchisor entity
- CEO title
- Chief Executive Officer
- Eric Lefebvre
- Incorporated in
- Delaware
- HQ
- 8000 NE Parkway Drive, Suite 100, Vancouver, Washington 98662
- Auditor
- PricewaterhouseCoopers LLP
- Audited financials
- Franchisor revenue
- $604.2M
- vs $597.5M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
- CEO
- Eric Lefebvre
- Headquarters
- Washington
- Founded
- 1982
- FDD year
- 2026
- States available
- 36
Can you afford it, and what does the money buy?
Entry cost runs 14% below the typical quick-service restaurants franchise.
Source: FDD 2026 · Items 5–7
Full Item 7 breakdown18 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial or Subsequent Franchise Feenot refundable | $15K | $25K | |
| Lease and Utilities Deposits and Payments | $3K | $8K | |
| Leasehold Improvements | $139K | $278K | |
| Signs | $9K | $25K | |
| Stamped Architectural Drawings | $6K | $9K | |
| As Built Survey | $3K | $4K | |
| Opening Package (Equipment, Supplies, Decor, Cabinets, POS, Smallwares) | $150K | $220K | |
| Miscellaneous Development Service Fees | $0 | $1K | |
| Inventory | $5K | $7K | |
| Initial Marketing Fees and Expenses (6 months) | $15K | $15K | |
| Franchise Premises Rent (3 months) | $9K | $12K | |
| Materials and Supplies | $500 | $2K | |
| Operations In-Store Training, Enterprise Solution Training and Foundations Class | $0 | $750 | |
| Travel and Living Expenses for Training | $1K | $9K | |
| Employee Training | $500 | $2K | |
| Insurance (3 months) | $375 | $1K | |
| Bookkeeping/Payroll Service (3 months) | $825 | $2K | |
| Additional Funds, Working Capital, and Miscellaneous Expenses (3 months) | $10K | $50K | |
| Total initial investment | $367K | $670K |
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
- $450K – $693K
- Bottom third — review vs category
- Liquid capital req'd
- $10K – $50K
- Top 40% of category vs category
- Franchise fee
- $15K – $25K
- Top 40% of category vs category
- Royalty
- 5.0%
- typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 7.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of net sales |
| Marketing / ad fund | 2.0% of net sales |
| Training fee | $750 |
| Transfer fee | $25K |
| Renewal fee | $13K |
| Inventory (initial) | $5K – $7K |
| Total fee load | 7.0% of rev |
What do units actually make?
Average unit sales run 40% below the quick-service restaurants norm.
Reported as net sales, not gross sales
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 Murphy's 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
$602K
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 Murphy's 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
Reported as net sales, not gross sales
- Avg gross sales
- $688K
- Per unit, per year
- Median gross sales
- $618K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross sales (Net Sales) ranges/averages by system-wide and by region, no franchisee net income disclosed
- Sample size
- 947 outlets
- vs category median 18 · large
- Range (low → high)
- $166K→$2.5M
- Cohort dispersion (min → max)
- Quartile band
- $314K→$1.4M
- Bottom 25% → top 25%
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 782 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 $688K/year in gross sales. Revenue-to-investment ratio: 1.2x.
Fee burden
Total ongoing fee load of 7.0% (near the Quick-Service Restaurants average).
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
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 averages
How Papa Murphy's Compares
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 1,014
- Opened
- 4
- Last reporting year
- Closed
- 40
- Terminated
- 31
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 8
- Term expired, not renewed (per Item 20)
- Turnover rate
- 3.9%
- Company-owned
- 49
- Corporate units in the system
- % franchised
- 95%
- vs corporate-owned
3-year detail · Item 20
- Opened (3yr)
- 19
- Closed (3yr)
- 0
- Terminated (3yr)
- 45
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 54
- Reacquired (3yr)
- 0
- Franchisor bought back
- Transfer rate
- 4.8%
- Owners selling to other franchisees
- Termination rate
- 2.5%
- Franchisor-initiated terminations
- Ceased ops
- 3.9%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 36 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.
36
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
- 119
- Loan volume
- $32.2M
- Median loan
- $243K
- 50th percentile
- Charge-off rate
- 9.3%
- 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)
- 90.7%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 52
- Defaults
- 10
- Typical loan rate
- 5.9%
- avg rate to borrowers
- Franchised industry avg
- 10.8%
- brand beats franchise avg ↓
- Jobs supported
- 1,894
- 5.9 per loan
- Lender concentration
- 26%
- top lender's share
Borrower mix: 50% went to startups / new businesses, 50% to established operators
Franchise vs independent — in limited-service restaurants, franchised businesses charge off at 10.8% vs 10.0% for independents — franchising is associated with 8% higher SBA default risk in this category.
Vintage analysis
Papa Murphy's charge-off rate by loan vintage
Top lenders financing Papa Murphy's franchisees
Showing 3 of 52 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.
Premium insight
SBA Lending Report
Deep-dive into Papa Murphy's's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 15 states
- Startup risk premium and job creation velocity
- 6-year lending trend
Instant access. No subscription.
What could kill this investment?
SBA loans charge off at 9.3% — 42% below the 16.0% national norm, i.e. lower 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 Murphy's presents elevated risk due to shrinking franchise system, undisclosed profitability metrics, history of litigation regarding franchisee obligations, and unprotected territory exposure.
Litigation (Item 3)
Multiple settled franchisee class-type actions (WFIPA claims re Item 19 representations) resolved 2014-2020 with payments ranging $10,000-$4,000,000 per group and several store buybacks; a declaratory judgment/tortious interference suit resolved via store purchase; and several state regulatory consent orders/settlements (Maryland, Virginia, New York) against MTY-affiliated predecessor brands (Triune/Blimpie/Maui Wowi/SweetFrog) for unregistered franchise sales or disclosure violations, with penalties from $2,500 to $50,000.
Largest disclosed settlement: $4,000,000
Bankruptcy (Item 4)
Disclosed in last 7 years
JND Tropics LLC (an entity of which the VP of Operations is a member, operating Tropical Smoothie Cafes) filed Subchapter V Chapter 11 bankruptcy June 12, 2025 in Arizona; not a bankruptcy of the franchisor itself.
Audited financials (Item 21)
Yes · PricewaterhouseCoopers LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
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: No
Score breakdown · what drove the 73 / 100 verdict
- 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
- 03MINORUnprotected territory creates direct competition risk from other franchisees and corporate-owned locations in same area
- 04MINOR5% royalty on top of operating costs with declining unit economics may pressure franchisee margins
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 7.0% 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 | 5 years |
| Allowed renewalsℹ | 1 |
| Territory type | none |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 25 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 21 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 3 |
| Curable defaultsℹ | 3 |
| Mandatory arbitration | No |
| Arbitration location | city where United States Arbitration and Mediation Service, Inc. has an office nearest the Support Center |
| Jury trial waiver | No |
| Governing law | Washington |
| Litigation count | 8 |
View Item 3 litigation summary
Multiple settled franchisee class-type actions (WFIPA claims re Item 19 representations) resolved 2014-2020 with payments ranging $10,000-$4,000,000 per group and several store buybacks; a declaratory judgment/tortious interference suit resolved via store purchase; and several state regulatory consent orders/settlements (Maryland, Virginia, New York) against MTY-affiliated predecessor brands (Triune/Blimpie/Maui Wowi/SweetFrog) for unregistered franchise sales or disclosure violations, with penalties from $2,500 to $50,000.
Items 10, 11
Training & Operations
- Classroom training
- 0 hrs
- On-the-job training
- 300 hrs
- Training location
- Designated Papa Murphy's training store
- Ongoing training
- Required
- Field support
- 325 hrs/yr
- On-site visits per year
- Time to open
- 7 mo
- From signing to launch
- Site selection
- franchisee, subject to franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- MenuLink
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: MenuLink
Item 20 · call current owners
Franchisee Contacts
1,158 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Papa Murphy's · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Papa Murphy's franchise?
The total investment to open a Papa Murphy's franchise ranges from $450K – $693K, 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 Murphy's franchise owners earn?
According to Item 19 of the Papa Murphy's FDD, the average gross sales per unit is $688K. The median is $618K. 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.
What is Item 19 in the Papa Murphy's 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 Murphy's FDD and qualifies whose outlets they describe.
What is Papa Murphy's's franchise failure rate?
Based on SBA 7(a) loan data, Papa Murphy's has a charge-off rate of 9.3% across 119 loans, meaning 9.3% 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 Murphy's franchise locations are there?
As of their most recent FDD filing, Papa Murphy's has 1,014 total units in the United States, including 965 franchised units and 49 company-owned units. 4 new units were opened in the latest reporting year.
Is Papa Murphy's a good franchise to buy?
FranchiseVerdict rates Papa Murphy's 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.