Papa Murphy’s Launches Aggressive Development Incentives Targeting 80 Key U.S. Markets

Backed by nearly 35 years of experience, more than 1,550 successful locations and a unique take ‘n’ bake pizza model, Papa Murphy’s holds the secret recipe to creating a competitive edge in the $40 billion pizza industry. By strategically increasing its market penetration in selected areas, Papa Murphy’s has created strong brand awareness and even stronger unit-level economics, driving rapid growth nationwide. Now, to further build on that successful approach, Papa Murphy’s is mounting an aggressive push for new market share in 80 key growth markets by offering a series of development incentives designed to attract new franchisees who are eager to take advantage of the opportunity to expand their share of the brand’s success.

Papa Murphy’s growth has already accelerated rapidly in many of these markets, like Jacksonville, Fla., where the brand’s presence has grown from five stores to 14 in just 18 months. In Knoxville, Tenn., store locations doubled from eight to 16, and locations tripled in Memphis from four to 13 during that same time period.

“We’ve observed a strong correlation between average weekly sales and annual sales volume when compared to the number of existing stores that we have in the market,” said Jayson Tipp, Chief Development Officer for Papa Murphy’s. “The more we penetrate a territory, the more our awareness grows, and with awareness comes trial. These new development incentives are another way we are partnering with our rapidly growing system of dedicated owners to expand our brand success even faster.”

Papa Murphy’s is offering the new incentives through December 30, 2016. To qualify for the Growth Market Development Incentive program, franchisees will be required to sign a new multi-store agreement (MSS) or area development agreement (ADA) of at least two stores. In return, Papa Murphy’s will provide a $5,000 franchise fee reduction per store. Additionally, each store qualifying for this incentive will receive a royalty fee waiver for its first 12 months of operation.

Papa Murphy’s has identified 80 designated market areas (DMAs) that are eligible to receive this incentive. These are areas where fewer than 10 stores are required to reach the brand’s targeted penetration level of one store per population of 80,000. These DMAs include 49 markets where Papa Murphy’s franchisees currently operate stores, as well as 34 DMAs adjacent to existing markets. New markets are also eligible through an ADA or MSS, as long as they can meet the one store opening per every population of 80,000 in five or fewer years.

“Papa Murphy’s stands on the precipice of exponential growth in dozens of key markets across the country, and we know our best franchisees are hungry for more,” said Ken Calwell, Chief Executive Officer and President of Papa Murphy’s International. “To help achieve our full growth potential, we are investing heavily to show our commitment to franchisees eager to take advantage of the growth opportunities Papa Murphy’s represents. By fostering more strategic, targeted growth in our franchise system we are building an even stronger future for our brand nationwide.”

In order to help franchise owners achieve this new market penetration goal, Papa Murphy’s approved vendor, Ascentium Capital, is offering a 60-90 day deferred interest or interest-only payment, a step-up payment program, where initial payments remain low and increase over time, and a seasonal payment adjustment option, where payments are indexed to rise or fall along with the seasonality of the business.

Any existing Papa Murphy’s owner who is eligible for growth and meets financial qualifications for the proposed store opening commitment may participate. This incentive is also available to new candidates who meet the proposed store opening commitment requirement within their agreement.

“We believe these types of strategic growth incentives can help us to eventually triple the size of Papa Murphy’s. Our brand is built on a simple business model with a strong value proposition, and we stand alone in the pizza industry because of the low breakeven of our unit-level operations. We have all of the right elements in place to use this aggressive push to quickly arrive at our next level of growth,” Tipp said.