The vendor opportunity at Papa John's
Papa John's reports Item 19 average unit sales of $1,133,480 for the 2,255 franchised standard restaurants open the entire year of 2022, and a combined AUV of $1,169,228 across a cohort of 2,751 restaurants, 2,255 franchised and 496 company-owned. The system spans 3,180 units, 2,658 of them franchised, part of the single-brand Papa John's holding company. The operator footprint maps 454 operators (178 multi-unit) across roughly 2,192 located units. Franchised outlets grew 3.7% year over year.
Who controls software purchasing
CEO and President Robert M. Lynch leads the headquarters team, which includes Chief Insights and Technology Officer Justin Falciola and Chief Supply Chain Officer R. Shane Hutchins. Franchisees must buy and use the computer system and software Papa John's periodically designates.
Tech named in the FDD, and what is actually required
The Designated Software and Information System are required: franchisees must purchase, license, and use them as Papa John's specifies, and the Information System is proprietary to Papa John's. PJ USA is currently the only approved supplier of the Information System and certain related services, and will also sell or license the Designated Software. The hardware components must come from an approved supplier and meet the Information System's specifications. Standard restaurants must also participate in the Papa Card program administered by Papa Card, Inc.
Procurement, renewals, and timing
Item 8 runs an approved-supplier list: franchisees must purchase pizza dough and sauce only from affiliate PJ Food Service, the Information System and Designated Software from PJ USA, and other items from any approved supplier, with a written-request path for alternative-supplier approval. The royalty runs 5% of sales (6% for Small-Town Non-Traditional Restaurants) on a 10-year initial term (5 years for Small-Town Non-Traditional Restaurants), with renewal requiring a remodel and the then-current Franchise Agreement.
How to read the Papa John's FDD
The embedded viewer below carries Papa John's 2023 Franchise Disclosure Document, including the Item 8 and Item 11 language summarized above.
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