Papa John's Franchise

Financing Details

Papa Johns generally does not offer direct or indirect financing, nor does it guarantee franchisee notes, leases, or other obligations. However, for franchisees who sign a Development Agreement to open multiple restaurants, its affiliate, PJUSA, may offer an equipment lease program. This program allows franchisees to acquire certain equipment, valued from $30,000 to $125,000, through a 48-month lease. The cost of this equipment is reimbursed by PJUSA within 60 days after the restaurant opens, the equipment ownership is transferred to PJUSA via a Bill of Sale, and the Equipment Lease is executed. Under this lease, no periodic payments are due; only a single payment of $50 is required at the end of the 48-month term, provided the franchisee remains in good standing. PJUSA retains a security interest in the equipment, and the franchisee's owners must personally guarantee all debts to Papa Johns and its affiliates. Prepayment is not available, and if the franchisee defaults, Papa Johns may terminate the lease, require payment of the unamortized amount, or repossess the equipment.

Litigation Summary

Papa Johns has been involved in three legal cases disclosed in Item 3. A lawsuit filed in May 2015 by a former franchisee, Pach Food Services, alleged breach of an equipment lease, consumer protection violations, unjust enrichment, and conversion. This case was settled in April 2016 for $30,000. In another case, a class-action antitrust lawsuit was filed in February 2019, alleging that Papa Johns' franchise agreements contained "no-poach" provisions that reduced competition for employees. A settlement in principle was reached in April 2022 for $5.0 million. Most recently, a former franchisee, I&R Foods LLC, filed a complaint in August 2023 against Papa Johns' parent company, PJI, alleging breach of contract and violations of California law related to the termination of franchise agreements. This dispute was compelled to arbitration and settled confidentially in March 2025, with PJI agreeing to pay $10,000.

Renewal Conditions

To renew their standard franchise agreement, Papa Johns franchisees must notify Papa Johns in writing between 4 and 12 months before their current term ends. They must be in full compliance with all existing agreements, have no outstanding defaults, and ensure all financial obligations to Papa Johns, its affiliates, the Marketing Fund, and any Cooperatives are current. Franchisees are required to sign Papa Johns' then-current standard Franchise Agreement, which may include different terms, and pay a renewal fee of $4,000. Additionally, they must sign a general release of claims, ensure their Principal Operator and other key employees complete all required training, and prove they have the right to continue occupying the restaurant premises. Substantial renovations and re-equipping of the restaurant to align with current brand standards may also be required, unless significant updates were made within the three years prior to renewal.

Staffing Notes

Papa Johns requires that a designated Principal Operator or a manager be present at the restaurant during all business hours to oversee operations, maintain product quality and sanitation, and ensure high standards of customer service. All team members must complete New Team Member Orientation (NTO) and be certified in at least three of the seven operational stations; primary certification is required within the first five scheduled shifts, with additional certifications completed by the twentieth shift. All restaurant managers must achieve certification to Papa Johns' operational standards through the Manager Development Program. For franchisees operating multiple locations, one qualified General Manager must be maintained for every four restaurants. Papa Johns emphasizes that franchisees are solely responsible for all employment decisions and ensuring their employees are properly trained in safe and proper operating procedures.