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Review of the Papa Murphys Franchise Opp and Startup Costs

Papa Murphy’s revolutionized the way that the American public saw the pizza industry. Instead of having limited pizza varieties and having to wait for a delivery driver that may or may not have dropped the ordered pizza multiple times, this franchise allows the customer to fully customize their pizza in the shop and then bake it at home. Takeout is easy with this franchise – just call in the order and it’s ready for you to take home and bake in about 20 minutes.

Started in 1995 when Terry Collins purchased two pizza chains and branded them together into one cohesive brand identity, the hallmark of a Papa Murphy’s Take ‘N Bake pizza is fresh ingredients, fast service, and a pizza parlor experience that can be replicated at home. If your community doesn’t have this franchise, then you have an exciting opportunity with an investment into this franchise! Could it be right for you?

What Are the Initial Costs of This Franchise Opportunity?

To get started with your own Papa Murphy’s franchise, you’re going to need to begin with a $25,000 franchise fee. With locations actively sought throughout all of Canada and the heartland of the United States, you’ll be joining a network of nearly 1,500 franchise locations that have established a brand identity that is fully associated with the take and bake concept of pizza. Your investment will get you a 10 year initial franchise agreement that is renewable upon its completion in a franchise opportunity that has been ranked as one of the Top 50 franchises in several categories for the last 5 years in a row.

You’ll also need a lower level of net worth and cash liquidity in order to qualify for this franchise opportunity. The net worth minimum that must be proven is $275k and you must have just $80k in cash liquidity. If you own more than one franchise like half of all the franchisees do, then you’ll need to replicate these minimums based on the amount of units that you wish to have. In return, you’ll have a wide variety of locations from which to choose for your franchise as the typical Papa Murphy’s is in a strip mall or other high traffic location and isn’t a standalone unit, which can really help to limit initial investment costs even further.

Papa Murphy’s is also a VetFran participant and qualifying veterans can receive up to $25,000 in royalty fees waived over the first three years of their new business opportunity. To qualify, you simply mist be a US veteran that was honorably discharged from the military. Royalties are deducted weekly from the net sales of each location and the continuing service royalty is 5%. There’s also a 2% royalty that goes to advertising on national and regional levels for added exposure of the brand. You’ll also need to set aside either 5% of net sales or $2k during each 4 week period for local marketing and promotions.

The estimated cost to get a franchise started is about $215k on the low estimate, $378k on the high estimate, and often depends on your chosen leasing location.

What Kind of Support Is Given?

One of the unique aspects of running a Papa Murphy’s franchise is that customer feedback is an essential component of the entire experience. Customers are encouraged to take surveys about every purchasing experience so that franchisees can maximize their best practices to service their community. A national toll-free line is setup to take these surveys on a franchisee’s behalf and the cost per month of this service is $35 plus an additional $0.49 per survey that goes above 50.

Papa Murphy’s also provides marketing kits for each franchisee that will help to establish a national brand identity within the locally owned unit. These kits range from $70 to $100 and may include everything from window banners to the paper instruction cards that tell people how to properly bake their pizza at home.

As for the training program, Papa Murphy’s provides a unique familiarization program that encompasses four different phases of the franchise owning experience. You’ll cover everything from product preparation and presentation to the use of selling aids and how to properly use the equipment in the store. This organization also provides franchisees with a step-in assistance in areas when a location experiences trouble so that immediate expertise can be had. This service is provided at cost with a 15% upcharge, which can quickly pay for itself.

There are also regional and national training opportunities, refresher courses, and other consulting opportunities available that will help your location find success. Your individualized training all depends on how familiar you are with the product, how good you are with difficult employees, and how successful you are with your local marketing plans.

Is This the Right Investment Opportunity?

Papa Murphy’s provides an exciting investment opportunity for entrepreneurs who are just getting started with a taste of success. The net worth minimums are low, the franchise fee is fair, and there are fewer hoops to jump through as a franchisee in this model than there are with other opportunities. In addition to that, you’re entering the popular pizza market in a niche way, allowing people to take home their own food to bake it to their preference. Pizza is one of the most craved foods there is and the average consumer eats over 50 slices of pizza per year.

How big is your community? Now multiply that number by 50 and then divide that second number by the amount of pizza parlors, takeout places, and other pizza makers there are in your expected territory right now. That number is a pretty good estimate as to how successful adding your franchise into the mix of options for the local consumer base will be. If the numbers add up, then this becomes a great place to further your portfolio, diversify your investments, and reach the level of success that you really want.

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