Papa Murphy’s is a take-and-bake pizza franchise that opened in 1981 in Vancouver, Washington. Customers pick out the type of pizza they want, watch the person make it in front of them, then take it home in a disposable tray to bake in their own oven.
Startup costs for beginning a franchise in 2014 range from $226,011 to $414,321. This includes the initial franchise fee, facility, equipment, inventory, training, insurance, payroll and working capital. In addition, Papa Murphy’s requires franchisees to have a minimum net worth of $275,000 as well as $80,000 in liquid capital.
There are two kinds of expenses for Papa Murphy's franchisees, the first of which is normal overhead and operating costs, including mortgage or rent, utilities, maintenance and upkeep on equipment, food inventory, packaging and labor, as well as taxes, insurance and debt service. In addition, franchisees continually pay Papa Murphy’s a percentage of store revenue for royalties, advertising and accounting. There are also set annual fees including franchise renewal, insurance, customer relations, franchise conventions and ongoing training.
Individual store earnings vary greatly depending on location and owner/manager. According to Papa Murphy's, its more than 1,425 franchises average $586,229 in annual net sales, with the top third averaging $870,188.
Based on average sales, a franchise owner who works and manages the store may realize up to $150,000 a year. Actual earnings may be less or more depending on the number of employees, how many hours the owner works, initial loan repayment amount and store sales.
Papa Murphy's franchises are most successful in the Northeast and Northwest, where the concept of take-and-bake pizza has taken hold and the chain has won several "Best Pizza" awards. In other sections of the country, though, franchise performance lags behind.
If you are considering investing in a Papa Murphy's franchise, you should obtain a copy of the company's franchise disclosure document and review it carefully as well as discuss the opportunity with existing franchisees.
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