Shopping Cart

No products in the cart.

How Profitable are Papa Murphy’s Franchises? 2022 Sales & Costs

With 1,136 franchise restaurants in the US alone, Papa Murphy’s is one of the most popular pizza franchises. It’s also popular amongst franchisees and entrepreneurs because of its low cost ($433,174 on average), much lower than the average investment cost for fast food franchises ($1.4 million).

But is this really a good business? How much profits can you generate with a Papa Murphy’s franchise? Should you invest in a Papa Murphy’s franchise restaurant?

In this article we’re looking at Papa Murphy’s and its Franchise Disclosure Document to find out how much sales and profits you can make with this business. Let’s find out!

Papa Murphy’s franchise: revenues, fees & profits

Franchise fee$25,000
Royalty fee5.0%
Marketing fee7.0%
Investment (mid-point)$433,174
Average annual sales$580,441
Investment to sales ratio1.3x
Investment payback*5.0 years (good)
Minimum net worth$275,000
Minimum liquid capital$125,000
* using 15% net profit margin

🔎 How does Papa Murphy’s compare vs. other franchises? Check the ranking

What is Papa Murphy’s?

Headquartered in Vancouver, Washington, Papa Murphy’s is the largest American take-and-bake pizza chain, with more than 1,200 stores in the United States and the United Arab Emirates. In addition to their take-and-bake pizzas, Papa Murphy’s also offers salads, dessert items, and soft drinks in various sizes.

Papa Murphy’s was founded by Terry Collins. Its first store opened in 1981 under Papa Aldo’s Pizza before later merging with Murphy’s Pizza in 1995 to form Papa Murphy’s Pizza.

Its franchising journey began in 1983 with its first franchise in McMinnville. The company is now the fifth-largest pizza chain in the United States.

Papa Murphy’s franchise: pros and cons

Operating a Papa Murphy’s franchise has the following pros and cons:

The Pros:

  • Brand popularity: Papa Murphy’s is not an ordinary name in the pizza industry. For over 40 years, the brand has served millions of customers, proving itself as a leading take-and-bake pizza chain in the US. Franchisees are assured of a large customer base that identifies with the brand and what it offers.
  • Simple to operate: Since Papa Murphy’s franchise model is on a takeout basis, there are no ovens, freezers, or dine-in costs. This leaves the franchisees with the sole responsibility of perfecting the quality of the pizza they offer.
  • Quality pizzas: The brand offers high-quality, non-frozen pizzas by utilizing freshly prepared ingredients, which are done in-house daily: hand-sliced fresh veggies, freshly grated mozzarella cheese, quality meat, and making their dough from scratch. This gives it a great competitive advantage over its competition.
  • Training and support: The chain offers extensive training and support to equip franchisees with basic restaurant operations and management skills. Its team of real estate experts helps franchisees with site selection, design, and construction of the restaurants. Also, it has a launch and grand opening program in place to help with the launch of the store and design printed, and online advertising for the continuous promotion of the local store.
  • No prior restaurant experience is needed: A Papa Murphy’s franchise is a good option for those who lack experience in the restaurant industry. It provides new franchisees with all the basics necessary for starting and running a successful take-and-bake pizza restaurant.
  • Less labor and space: The franchise does not require an oven or freezers, so it does not require much space for its establishment. Additionally, it may also require less labor because the pizzas are baked outside the store.

Cons

  • No financial assistance: The franchisor does not offer any financial assistance to its franchisees. New franchisees need to find ways of funding their restaurants, such as third-party financing.
  • No exclusive territory protection: The franchisor does not guarantee its franchisees an exclusive territory of operation. Therefore, franchisees may face competition from other Papa Murphy’s restaurants or competitive brands controlled by the franchisor.
  • No baked pizzas: The chain does not offer baked pizzas. Therefore, it is not a good option for those looking for a baked pizza dining experience. It also lacks a delivery system, leaving room for possible future competition should a rival arise.

How much does a Papa Murphy’s franchise cost?

You would invest around $433,174 to open a Papa Murphy’s restaurant franchise.

This amount is an average, so it can vary based on different factors (your location, market price of equipment, etc.). According to the latest FDD, the investment amount ranges from $308,469 to $557,879.

What do you are paying for? Well, this amount covers all the costs needed at the start of a restaurant business. In addition to the $25,000 franchise fee, the investment amount also covers:

  • Formation costs: lease and utilities deposits, leasehold improvements, development service fees, signs, décor, cabinets, point-of-sale system, etc.
  • Initial Marketing Fees: marketing fees and expenses for first 6 months.
  • Operating expenses: inventory, bookkeeping/payroll service, insurance, materials and supplies, 3 months’ working rent, 3 months’ working capital, etc.
Type of costInvestment amount
Initial franchise fee$25,000
Formation costs$244,109 – $431,928
Initial marketing fees$15,000
Operating expenses$24,360 – $85,951
Total$308,469 – $557,879
Source: 2022 FDD

How much can you make with a Papa Murphy’s franchise?

On average, a Papa Murphy’s franchise makes $580,441 in sales per year. This number is the annual net sales of 1,136 franchised restaurants operating in 2021.

When it comes to growth, Papa Murphy’s franchises’ average net revenue has been steadily growing over the years despite the pandemic (+5.5% and +9.1% revenue growth vs. 2019 and 2020 respectively).

YearStoresMedian net salesRevenue growth
20191,230$504,406
20201,193$532,262+5.5%
20211,136$580,441+9.1%

How profitable is a Papa Murphy’s franchise?

On average, a Papa Murphy’s franchise makes $148,642 in profits per year. That means you may expect a 26% adjusted EBITDA margin

As adjusted EBITDA is not as same as net profit, you can’t keep all that 26% of the total revenue. Rather, you may need to deduct taxes, debt interest expenses, and other costs from this margin.

The 26% adjusted EBITDA margin is in line with similar franchises as per our intelligence (~25-27% industry average). This is due to a number of reasons: high COGS (31.2% sales), and high royalty and marketing fees (12%) despite relatively low rent (4.7%) and labor (26.5%) costs.

Profit-and-lossAmount ($)As % of sales
Sales$580,441100%
COGS$(181,098)31.2%
Labor$(153,817)26.5%
Rent$(27,232)4.7%
Royalty + marketing fees$(69,653)12.0%
Adjusted EBITDA$148,642~26%

Is a Papa Murphy’s franchise a good investment?

With a 26% adjusted EBITDA margin, we can reasonably assume that you can reach a net profit margin of about 15%. This represents $87,000 per year, this is what you would pay yourself as dividends for example, so the real profits you could say.

When we compare this $87,000 profit to the investment cost of $433,174 you must pay for at the outset, this represents a 5 years payback. So you would wait 5 years on average to reimburse your initial investment of $433,174 which is in line with other franchises and satisfactory.

From that perspective, a Papa Murphy’s franchise is a good investment as you would reimburse your investment within 5 years.

Papa Murphy’s Business Plan

Download the Papa Murphy’s business plan and get your franchise funded

Including a 5-year financial plan built with the latest Franchise Disclosure Document numbers

How does it compare vs. other franchises?

FranchiseInvestment ($)Sales ($)S/I RatioPayback (years)Min. net worth ($)Min. liquid capital ($)
Chick-Fil-Ahttps://sharpsheets.io/blog/chick-fil-a-franchise-costs-profits/Chicken1,363,5104,227,4173.12.2--
Dunkin' Donutshttps://sharpsheets.io/blog/dunkin-donuts-franchise-costs-profits/Donuts779,0001,056,5211.44.9500,000250,000
Domino'shttps://sharpsheets.io/blog/dominos-franchise-profits-costs/Pizza398,7251,286,4283.23.9250,00075,000
Krispy Kremehttps://sharpsheets.io/blog/krispy-kreme-franchise-costs-profits/Donuts824,0003,400,0004.11.62,000,000300,000
Little Caesarshttps://sharpsheets.io/blog/little-caesars-franchise-costs-profits/Pizza1,022,850798,1130.88.5350,000150,000
Wingstophttps://sharpsheets.io/blog/wingstop-franchise-costs-profits/Chicken631,6951,460,4592.32.91,200,000600,000
Steak 'n Shakehttps://sharpsheets.io/blog/steak-n-shake-franchise-costs-profits/Burger, Milshakes815,6261,346,3321.74.01,500,000500,000
Crumbl Cookieshttps://sharpsheets.io/blog/crumbl-cookie-franchise-cost-profits/Sweets507,2241,582,0903.12.1300,000150,000
Taco Bellhttps://sharpsheets.io/blog/taco-bell-franchise-costs-profits/Mexican462,4131,650,0003.61.91,500,000750,000
Popeyeshttps://sharpsheets.io/blog/popeyes-franchise-costs-profits/Chicken1,095,7831,444,6171.35.11,000,000500,000
Smoothie Kinghttps://sharpsheets.io/blog/smoothie-king-franchise-costs-profits/Smoothie688,108573,2690.88.0300,000100,000
Jersey Mike'shttps://sharpsheets.io/blog/jersey-mikes-franchise-costs-profits/Sandwich574,3231,220,5862.14.7300,000100,000
Nothing Bundt Cakeshttps://sharpsheets.io/blog/nothing-bundt-cakes-franchise-costs-profits/Sweets538,6501,307,2802.42.7600,000150,000
Jimmy John'shttps://sharpsheets.io/blog/jimmy-johns-franchise-costs-profits/Sandwich513,650874,8451.73.9300,00080,000
Texas Roadhousehttps://sharpsheets.io/blog/texas-roadhouse-franchise-costs-profits/Steakhouse4,209,5002,955,5340.79.5n.a.200,000
Kung Fu Teahttps://sharpsheets.io/blog/kung-fu-tea-franchise-costs-profits/Bubble tea250,125353,2371.44.7n.a.25,000
Wendy’shttps://sharpsheets.io/blog/wendys-franchise-cost-profits/Burger1,374,8331,791,2311.35.11,000,000500,000
Burger Kinghttps://sharpsheets.io/blog/burger-king-franchise-costs-profits/Burger1,242,9501,215,9701.06.81,500,000500,000
Sonic Drive-Inhttps://sharpsheets.io/blog/sonic-drive-in-franchise-costs-profits/Burger1,467,0831,617,0001.16.01,000,000500,000
Panera Breadhttps://sharpsheets.io/blog/panera-bread-franchise-costs-profits/Sandwich2,290,5002,599,4321.15.97,500,0003,000,000
Pizza Huthttps://sharpsheets.io/blog/pizza-hut-franchise-costs-profits/Pizza935,575906,9111.06.9700,000350,000
KFChttps://sharpsheets.io/blog/kfc-franchise-costs-profits/Chicken1,802,0501,567,4740.97.71,500,000750,000
Arby’shttps://sharpsheets.io/blog/arbys-franchise-costs-profits/Sandwich1,184,9751,126,2631.07.01,000,000500,000
Dairy Queenhttps://sharpsheets.io/blog/dairy-queen-franchise-costs-profits/Ice Cream1,404,2201,143,1800.88.2750,000400,000
Jack in the Boxhttps://sharpsheets.io/blog/jack-in-the-box-franchise-costs-profits/Burger2,195,8001,755,5030.812.51,000,000250,000
Papa John’shttps://sharpsheets.io/blog/papa-johns-franchise-costs-profits/Pizza353,6951,101,1273.12.1750,000250,000
Zaxby’shttps://sharpsheets.io/blog/zaxbys-franchise-costs-profits/Chicken534,7502,229,1874.22.41,000,000500,000
Hardee’shttps://sharpsheets.io/blog/hardees-franchise-costs-profits/Burger1,759,0001,147,9750.710.21,000,000300,000
Culver’shttps://sharpsheets.io/blog/culvers-franchise-costs-profits/Burger4,044,5003,051,7620.88.82,000,000350,000
Five Guyshttps://sharpsheets.io/blog/five-guys-franchise-costs-profits/Burger511,2251,203,3662.42.8500,000250,000
Carl’s Jr.https://sharpsheets.io/blog/carls-jr-franchise-costs-profits/Burger1,860,3351,419,5160.88.71,000,000500,000
Baskin-Robbinshttps://sharpsheets.io/blog/baskin-robbins-franchise-costs-profits/Ice Cream465,100316,8150.79.8250,000125,000
IHOPhttps://sharpsheets.io/blog/ihop-franchise-costs-profits/Pancakes2,058,3021,553,3110.88.81,500,000500,000
Applebee’shttps://sharpsheets.io/blog/applebees-franchise-costs-profits/Casual American5,137,9662,356,9650.514.51,000,000500,000
Denny'shttps://sharpsheets.io/blog/dennys-franchise-costs-profits/Casual American3,785,4591,639,5490.415.41,000,000500,000
Papa Murphy'shttps://sharpsheets.io/blog/papa-murphys-franchise-costs-profits/Pizza433,174580,4411.35.0275,000125,000
Auntie Anne'shttps://sharpsheets.io/blog/auntie-annes-franchise-costs-profits/Pretzels229,692343,1351.55.6300,000100,000
Firehouse Subshttps://sharpsheets.io/blog/firehouse-subs-franchise-costs-profits/Sandwich613,186888,3561.44.6350,000100,000
Tropical Smoothie Cafehttps://sharpsheets.io/blog/tropical-smoothie-cafe-franchise-costs-profits/Smoothie430,500961,9692.23.0350,000125,000
Marco’s Pizzahttps://sharpsheets.io/blog/marcos-pizza-franchises-costs-profits/Pizza437,625895,5232.03.3400,000100,000
Cinnabonhttps://sharpsheets.io/blog/cinnabon-franchises-costs-profits/Sweets276,062394,8971.45.8300,000120,000
Cold Stone Creameryhttps://sharpsheets.io/blog/cold-stone-creamery-franchise-costs-profits/Ice Cream310,956417,5881.35.0250,000100,000
Jambahttps://sharpsheets.io/blog/jamba-franchise-costs-profits/Smoothie414,562597,0281.47.7300,000100,000
Church’s Chickenhttps://sharpsheets.io/blog/churchs-texas-chicken-fees-sales-costs/Chicken1,195,1471,395,0881.25.71,000,000300,000
Moe’s Southwest Grillhttps://sharpsheets.io/blog/moes-southwest-grill-franchises-costs-profits/Mexican792,3701,013,3611.35.21,000,000100,000
Tim Hortonshttps://sharpsheets.io/blog/tim-hortons-franchises-costs-profits/Coffee1,242,7501,188,2401.07.0500,000100,000
Checkers & Rally'shttps://sharpsheets.io/blog/checkers-franchises-profits-sales-costs/Burger837,8471,039,7731.25.4750,000250,000
Charleys Philly Steakshttps://sharpsheets.io/blog/charleys-philly-steaks-costs-profits/Sandwich509,806786,2331.54.3500,000100,000
Buffalo Wild Wingshttps://sharpsheets.io/blog/buffalo-wild-wings-costs-profits/Chicken3,546,9002,534,1480.79.31,500,000750,000
Rita's Icehttps://sharpsheets.io/blog/ritas-ice-franchise-costs-profits/Ice Cream215,839248,3401.25.8300,000100,000
A&W Restaurantshttps://sharpsheets.io/blog/aw-restaurants-franchises-costs-profits/Burger786,750851,2121.16.2350,000150,000
Hungry Howie’s Pizzahttps://sharpsheets.io/blog/hungry-howies-pizza-franchise-costs-profits/Pizza419,682806,8991.93.5750,000200,000
Bojangleshttps://sharpsheets.io/blog/bojangles-franchise-costs-profits/Chicken1,658,0001,801,0571.16.11,000,000500,000
McAlister’s Delihttps://sharpsheets.io/blog/mcalister-deli-franchise-costs-profits/Sandwich1,424,9631,865,8611.35.11,000,000500,000
Round Table Pizzahttps://sharpsheets.io/blog/round-table-pizza-franchise-costs-profits/Pizza783,2501,037,8161.35.0500,000200,000
Qdoba Mexican Eatshttps://sharpsheets.io/blog/qdoba-mexican-eats-franchise-costs-profits/Mexican659,250972,9621.54.5
Freddy’shttps://sharpsheets.io/blog/freddys-franchise-costs-profits/Burger1,453,0401,792,9291.25.41,000,000400,000
Taco John’shttps://sharpsheets.io/blog/taco-johns-franchise-costs-profits/Mexican1,119,0001,124,9801.06.61,000,000400,000
Scooter’s Coffeehttps://sharpsheets.io/blog/scooters-coffee-franchise-costs-profits/Coffee1,143,250797,1010.79.6500,000200,000
Einstein Bros. Bagelshttps://sharpsheets.io/blog/einstein-bros-bagels-franchise-costs-profits/Sandwich750,075885,0111.25.71,000,000536,500
Great American Cookieshttps://sharpsheets.io/blog/great-american-cookies-franchise-costs-profits/Sweets385,275452,7711.25.7250,000100,000
Wienerschnitzelhttps://sharpsheets.io/blog/wienerschnitzel-franchise-costs-profits/Hot dogs873,300880,9801.06.6600,000250,000
Blaze Pizzahttps://sharpsheets.io/blog/blaze-pizza-franchise-costs-profits/Pizza865,4501,096,4321.37.9500,000300,000
Wetzel's Pretzelshttps://sharpsheets.io/blog/wetzels-pretzels-franchise-costs-profits/Pretzels377,571748,8572.03.4300,00050,000
Pizza Ranchhttps://sharpsheets.io/blog/pizza-ranch-franchise-costs-profits/Pizza3,268,3001,174,0880.418.61,000,000297,000
Del Tacohttps://sharpsheets.io/blog/del-taco-franchise-costs-profits/Mexican1,406,8501,345,3411.07.02,000,000500,000
Schlotzsky’shttps://sharpsheets.io/blog/schlotzskys-franchises-costs-profits/Healthy, Salads1,102,9331,053,3330.322.21,000,000300,000
Captain D’shttps://sharpsheets.io/blog/captain-ds-franchise-profits-costs/Seafood982,7781,067,8160.419.01,000,000350,000
Biggby Coffeehttps://sharpsheets.io/blog/biggby-coffee-franchise-profits-costs/Coffee310,575648,3520.320.0300,000100,000
Which Wichhttps://sharpsheets.io/blog/which-wich-franchises-profits-costs/Sandwich330,375281,8860.322.2500,000150,000
Marble Slab Creameryhttps://sharpsheets.io/blog/marble-slab-franchises-costs-profits/Ice Cream407,360251,0520.416.7250,000100,000
Mountain Mike's Pizzahttps://sharpsheets.io/blog/mountain-mikes-franchise-profits-costs/Pizza410,900865,7130.320.0300,000100,000
Huddle Househttps://sharpsheets.io/blog/huddle-house-franchise-cost-profits/Diner988,743712,4280.513.3600,000300,000
L&L Hawaiian Barbecuehttps://sharpsheets.io/blog/ll-hawaiian-barbecue-franchises-costs-profits/BBQ334,350612,9210.333.3500,000150,000
Chicken Salad Chickhttps://sharpsheets.io/blog/chicken-salad-chick-franchises-costs-profits/Healthy, Salads651,0001,202,0200.320.0750,000250,000
Golden Chickhttps://sharpsheets.io/blog/golden-chick-franchises-costs-profits/Chicken362,975917,6092.52.62,000,000425,000
Perkinshttps://sharpsheets.io/blog/perkins-franchise-costs-profits/Diner1,922,7281,729,2460.97.41,500,000500,000
Waba Grillhttps://sharpsheets.io/blog/waba-grill-franchises-costs-profits/Teryaki454,000466,5361.06.51,000,000250,000
Bruster’s Ice Creamhttps://sharpsheets.io/blog/brusters-franchises-profits-costs/Ice Cream663,925466,6960.79.5375,000150,000