Food Franchise

Posts Tagged ‘Pizza Hut’

The reason franchises work is that they have an established name that is known nation wide; therefore, investing in the franchise is fairly safe due to the name itself. Of course you will need to make it successful, but the hard part is over with – establishment.

I know of at least one franchise that people are buying into that isn’t known at all. It’s some guy claiming that he made millions of dollars in foreclosure real estate. You buy into the franchise for about $50,000, then you pay $3,000 a month for advertising – which depending on your market will produce about 7 leads a month – he promises a GOOD 25! Then what you really get from the franchise is training. Week long seminars and audio tapes, and maybe a weekly conference call. I’m sorry, but that’s not my idea of a good investment of $50,000+. Ethical Home Buyers – that’s the name of the franchise – stay away!

Think about this! If an endeavor is so successful, why are they willing to share franchises? If the answer is uncertain – STAY AWAY! Of course the franchiser is doing it to make money, but if the money is really as good as they say it is – why don’t they open the place themselves. They’ll sure make a lot more money that way. RISK! That’s the answer – they aren’t willing to risk their own capital, so they make a bunch of big claims and promises – then if you fail, they release themselves from any obligation and let you fall on your ass.

So the most important thing to think about before starting a franchise? Is the franchise name universal and well-known (ie McDonalds, Wendy’s, Pizza Hut – those kinds of franchises are safe to invest in)

Papa John’s Pizza is the third largest pizza delivery/restaurant in the United States behind Pizza Hut and Domino’s. With nearly 3300 restaurants spread throughout America and 20 other countries, odds are there’s one up the street. If not, www.PapaJohns.com will having you eating in about an hour. Eating out has never been so easy. Now you can be served while at home.

Papa Johns was started by John Schnatter late 1984 in Jefferson Indiana. At age 18, Schnatter was earning college money delivery pizza for a Greek restaurant, when he decided to sell his own pizza in the back of his dad’s Lounge. He cut a hole thru a closet with a chainsaw, put a pizza oven in and began making money. In 1985, due to high sales, they changed the name from Mack’s Lounge to Papa Johns.

Headquarters: Louisville, Kentucky Owner: John Schnatter Since: 1985

Most of the 3300 restaurants in the Papa Johns Family are franchises. In order to qualify to own a franchise, a detailed background and financial check are preformed. You must have a NET WORTH of a least $250,000 and another 250,000 in cash or credit line available. If you’ve got more cash and want your own chain, with 4-10 restaurants you’ll need a NET Worth of a million dollars and 250,000 in available cash or credit per restaurant. Pricey to play with the big boys.

Getting approved is the hard part . On www.papajohn.comunder franchise info, you can download a Consideration Form. With this form you will need to submit a business plan and financial plan for the getting and making money. Submit an outline of why and how you will become a member of their team. They will require there be at least two partners. Both will need to submit full resumes with the consideration forms. It is important to have one applicant with experience in fast food management. It is mandatory this person live in the area of the location. This applicant will be considered the Principal Operator. The other partner shall have education in Business Management. With the Consideration Form, Resumes , financial documentation of Net Worth and credit capabilities, Business and financial plan, you are on your way to Pizza Royaly.

You’ve been approved, Now get ready to have money roll in, then watch it roll back out.

The initial fee is 25,000 per restaurant.

Papa John, REQUIRES you spend at least $ 9,000 on the Grand Opening. They want it big.

A royalty fee of 5% of monthly profit is sent to Papa Johns Corp. every month.

Papa John also requires another 2.7% of monthly sales be paid into a National Advertising Fund,

4.3% of monthly sales profit must be used on local ads. The Percentage of profit paid out to be one of Papa Johns elite Pizza People, 12%.

Another way to make money with the Franchise Papa Johns? NASDAQ (PZZA) about 19.50 per share