How Much It Really Costs To Open A Papa Murphy's Franchise

According to Papa Murphy's estimate, the opening of one of their franchises requires an initial investment from a prospective franchisee of between $286,919 and $524,205. Most of this, however, is due more to the cost of acquiring the various bits and bobs to open a franchise, which they put to be around $120,000 to $180,000, than the franchise fee itself, for which they charge $25,000.

That said, only relatively well placed individuals will be able to take advantage of the opportunity. This is because, to be considered, candidates must have a net worth of $350,000, $125,000 in liquid cash, and a credit score of 670 or higher, as also stated.

In all fairness, however, this is only around 10 to 15 percent of the cost of opening a McDonald's, as previously noted. Moreover, as Bizfluent writes, store owners can expect to make around $150,000 annually, depending on sales, number of employees, loans, and other such considerations. More importantly, this amount is about the same as what a McDonald's franchise owner makes in a year. 

One major difference between the two is that Papa Murphy's operates with a "take 'n' bake" method, meaning consumers bake the pizzas at home. So, Papa Murphy's franchisees have little to no cost for food preparation and seating. So, for less investment and fewer costs heaped on by corporate, you could ensure a pretty decent stream of income.

Papa Murphy's customers demonstrate brand loyalty

Such a disparity in costs and earnings between McDonald's and Papa Murphy's may make some wonder whether Papa Murphy's is a case of being too good to be true. After all, it's not one of the big legacy pizza places, like Papa John's, despite nearing almost 40 years in the business. A 2019 piece by Restaurant Business will only add concern to that doubt. It points out that Papa Murphy's debt, inconvenient practice of take 'n' bake, and new management were putting the brand under strain.

However, this may be reading Papa Murphy's through the lens of McDonald's-sized empires. In 2020, for example, Nation's Restaurant News crowned Papa Murphy's with the title of "True Loyalty" for the second year in a row. The meaning behind the title is that consumers chose the brand out of loyalty, not convenience. In other words, they liked the pizza enough not to care about the fact that they have to bake the pizzas themselves.

Similarly, Entrepreneur included Papa Murphy's in the top 30 percent of 1,105 applicants on their list of top food franchises of 2020. So, despite the fact that the Papa Murphy's name is not as ubiquitous as the golden arch, the small brand can be resilient enough to warrant a franchisee's bet.