GUIDE TO BUYING A PAPA MURPHY’S FRANCHISE
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GUIDE TO BUYING A PAPA MURPHY’S FRANCHISE JOIN AMERICA’S LARGEST TAKE 'N' BAKE PIZZA CHAIN Get your piece of the freshest pie around!
Transcript of GUIDE TO BUYING A PAPA MURPHY’S FRANCHISE
GUIDE TO BUYING A
PAPA MURPHY’S FRANCHISE
JOIN AMERICA’S LARGEST TAKE 'N' BAKE PIZZA CHAINGet your piece of the freshest pie around!
This BUYER’S GUIDE has been created to
provide a new franchisee candidate with
valuable information about our brand, the
approval criteria for a new owner and to
assist with your decision making process – are
we a good fit for each other as franchisee
and franchisor? It also provides guidance
through the stages in the discovery process
so you can understand what’s involved and
when it all takes place.
We appreciate your interest in the Papa
Murphy’s franchise opportunity and hope
you find this guide to be resourceful and
helpful in your journey.
- Papa Murphy’s Development Team
WE'RE TOTALLY DIFFERENT.
We spend time mixing and proofing
dough, shredding whole-milk
mozzarella, and chopping veggies.
And then WE DON'T BAKE the pizza.
Why? Because scratch-made
pizzas baked at home are totally
crave-worthy.
WE'RE SIMPLE.
Our take ‘n’ bake model means no
ovens, freezers or dine in, which
provides lower investment costs
and allows you to focus on building
customer relationships by creating
the best pizza ever.
WE’RE KIND OF A BIG DEAL.
Our story began in 1981 and now
we've grown from just one store
to the 5th largest pizza chain in
the nation, constantly rated #1
by consumers.
SECTION I – Orientation
• Our Franchise Recruitment Team………………….………………………1
• Brand Core Values…………………. ……………………….……………….2
• Franchise Relations Pact…………………………………….………………3
• Company History Timetable………………………………………………..4
• Brand Attributes……………………………………………………………….5
• Owner Qualifications…………………………………………….…………6-7
• Support Services………………………………………………….…………8-11
SECTION II – Due Diligence
• Discovery Process………………………………………………..…………12
• Franchise Disclosure Document (FDD)………..……………………13-14
• Franchisee Validation …………………………………………………….15
• Discovery Day………………………………………………………………16
SECTION III – Decision Time
• Final Approval/Sign Franchise Agreement………….…….…..………17
CONTENTS
FRANCHISE SALES TEAM
Lesly Harden, Lead Qualifier
360.449.4130
Email: [email protected]
Erin Hughes, Franchise Development Specialist
360.449.4149
Email: [email protected]
Rhonda McGrew, Director Franchising
360.607.7890
Email: [email protected]
Shemar Pucel, Franchise Sales Director
757-254-3739
Email: [email protected]
Victoria Tullett, Senior VP Legal, General Counsel
360-607-8003
Email: [email protected]
• New Candidate Inquiry Process
• New Franchise Owner Awarding Process
• Escalated issues for Senior Management
Page 1
• Inside Sales Related Activity
• Franchise Development Functions
PRIMARY SUPPORT ROLE
CORE VALUES
Our core values are the foundation of
our company. They represent our shared
beliefs and principles. Our culture is what
sets them into motion. These core values
partly represent who we are already and
partly represent who we aspire to be.
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FRANCHISE RELATIONS PACT
Our business is built on relationships, including
relationships with our communities, other owners,
business partners, store staff, and, of course,
each other. The Support Center team, in
collaboration with our Franchise Advisory Board,
developed our Franchise Relations Pact - a list of
guiding principles to set expectations of how we
will treat each other.
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COMPANY HISTORY
Received our first of many
national consumer recognitions
as a top ranking pizza chain
Jack-O-Lantern Pizza
debuts, turning Halloween
into our highest sales day
launch of the Gourmet Delite
Acquisition/merger completed
with MTY Food Group Inc.
Our first store opened in Hillsboro,
OR (under the Papa Aldo’s name)
Papa Aldo’s & Murphy’s Pizza merged
forming Papa Murphy’s
Our first franchise location
opened in McMinnville, OR
Launched new ecommerce
website and mobile app
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OUR QUALITY
We’re consistently rated high in consumer surveys because because we have the best product. Higher-quality ingredients
means the most flavorful pizzas. And baking them fresh at home means the best pizza experience possible and the best
tasting pizza, of course.
Scratch-made dough
Hand-sliced veggies
Freshly grated cheese
Butcher quality meat
Unique topping choices
Freshly baked at home
America’s Best Customer Service: Pizza Chains
2020, 2019
Consumer Picks #1 Pizza Chain: Best in Class
2020, 2019, 2018, 2017, 2015, 2013, 2012, 2011
Consumer’s Choice Awards (QSR)
2017 - #1 Overall Takeout Capabilities
2016 - #1 Food Quality & Top Consumer Satisfaction
2015, 2013 - Most Likely to Recommend by Consumers
2014 - #1 Customer Loyalty
2013 - #1 Food Chain
Best Fast Food Restaurants in America
2014 - #1 Pizza Chain 2014 - #2 Overall Chain
(the only year the survey was completed)
#1 Rated Pizza Chain
2012, 2011, 2010
Top Food & Top Service
2011, 2010, 2009
#1 RATED
PIZZA CHAIN
Association of Talent & Development
2019 – Award Winner for Excellence in Training & Talent
Development
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SUCCESSFUL FRANCHISE OWNERSHIP
YOU MIGHT BE A GREAT FIT WITH PAPA MURPHY’S IF YOU
POSSESS:
• A solid business acumen and desire to grow.
• Experience with leading a team with a variety of
backgrounds.
• A service mindset that extends to helping customers
and mentoring your crew.
• An appreciation of a proven system and processes.
• A commitment to day-to-day operations and full-time
management.
• An outgoing personality and loves building
relationships throughout the community.
• A passion to lead top-notch store-level execution of
our product and promotions.
Papa Murphy's franchisees are typically loyal customers that love the product and brand so much that they wanted to make it
a part of their life. In addition, they are very engaged in the ownership of their business. Being involved with the day-to-day
operations, both in the store and out in the community, is the backbone to the strength of our brand's system since 1981.
THIS IS NOT THE RIGHT OPPORTUNITY FOR YOU IF YOU:
• Prefer your own methods of running a business.
• Avoid community outreach to build the business.
• Have a plug-and-play mentality.
• Do not plan on being present in the store.
• Are buying the business for someone else (ie: family
member, hands-off partnership, etc).
• Are uncomfortable managing a crew with a diverse age
group.
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FINANCIAL REQUIREMENTS
There are several industry lenders that have a history of working with our franchise owners and are familiar with our business model. You’re
welcome to use any lender you wish, but as courtesy, we’re happy to refer you to any of the following lenders:
The amount of money you plan to invest will play
the biggest factor in determining the minimum
financial strength requirements.
As a frame of reference, based on the total initial
investment range of a new store buildout as outlined in our
Franchise Disclosure Document (FDD), our criteria is to
have a minimum net worth of $350,000 with a minimum of
$125,000 of that in liquid assets (monetary assets that are easily converted to cash).
In a resale transaction, the purchase price is set by the
franchise owner selling their business, so the investment
cost will vary significantly from one sale to another,
therefore this could potentially alter the financial strength
requirement higher or lower.
Our Franchise Recruitment Team will be able to work with
you personally based on the purchase price of the
business for sale.
OTHER INVESTMENT FACTORS
Initial investment includes more than just the cost of buying
or building the store. Funds will be required for some or all
of the following:
• Professional and licensing fees (financing, legal,
local/state, etc)
• Marketing funds to drive initial business
• Working capital for your business (inventory, supplies,
etc)
• Adequate liquidity for living expenses while growing
business
• Future required remodels or equipment upgrades
• Hardware or software updates related to Point of Sale
systems
• Fees associated with franchise purchase or transfer
www.AscentiumCapital.com
Dennis Pratte
281-902-1950
DCV Franchise GroupAnthony [email protected]
www.IRHCapital.com
Brian Psenicnik
224-545-5439
www.DiamondFS.com
TRAINING
Owning your own franchise requires a
great deal of commitment and energy but
it also comes with enormous rewards.
We want to provide you with the best tools
to set you up for success so we have put
together a 3 phase New Owner Training
Program* that will help you on your path to
success as a franchise owner.
In addition to the initial New Owner
Training, we offer One Bite at a Time
Career Path Training curriculum available
for owners, managers and crew members.
PHASE 1 - IN-STORE EXPERIENCE
• Introduction to Store Operations
• Pizza & Product Preparation
3 Days
Training Store
(location TBD)
Travel/Accomodations
Required
PHASE 2 - OPERATIONS TRAINING• Preparation Skill Development
• Product flow & specifications
• Guest Experience
• Management
Duties
• Inventory/Ordering
• Scheduling
• Rush Management
• POS Training
20-25 Days
minimum
(4-5 weeks,
5 days/week)
PHASE 3 - FOUNDATIONS CLASS
• Marketing
• Operations
• Human Resources
• Administration
• ServSafe/Ntl Food Hander Certification
5 Days
Support Center
Vancouver WA
*As-of 2020, this class is being conducted virtually
*See Item 11 of Franchise Disclosure document for details. Page 8
REAL ESTATE/CONSTRUCTION SUPPORT
Store location is one of the most important aspects of any franchise business.
Whether buying an existing store or building a new store, Papa Murphy’s has
dedicated real estate, design and construction professionals ready to help you.
FOR PURCHASE OF EXISTING STORES
• The real estate is already there! During your due diligence, we strongly
suggest you review the lease and occupancy costs, in addition to the
overall P&L of the location. We’ve provided some tools in the Buyer’s
Checklist to help.
• One of the benefits of being a franchise owner, is you can reach out to a
Papa Murphy’s real estate director for general help on how to work with
landlords for lease extensions, rent negotiations, or relocations as the need
arises.
• Please note that Papa Murphy’s real estate professionals do not take
the place of an attorney and do not offer legal advice
• Support related to store remodels as they are due in the future.
• Real estate education
• Market planning
• Broker selection
• In person review of potential sites• Letter of intent
• Site package approval with Papa Murphy’s Real Estate Committee
• Site survey
• Site plans and architectural drawings
• Contractor identification/screening• Store construction
FOR BUILDING A NEW STORE
Once you’ve secured the rights to a new location, Papa Murphy’s Development team will help you with all of the following functions:
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MARKETING SUPPORT
Even with a great location, effective marketing is an essential part of your success. Papa Murphy’s has an experienced Marketing Team to
help you get the word out and keep customers coming through your door (or pick up window). Key areas of marketing support include:
BRAND STRATEGY AND
CREATIVE PRODUCTION PRODUCT INNOVATION DIGITAL PROGRAMS
Continued development of the Papa
Murphy’s brand, including marketing
strategies and creative production such
as television, radio, digital and print
content.
Development of product
strategy and promotions to help
drive customer engagement
and awareness.
Execution of marketing campaigns
via social media integrated with other
platforms to drive customer traffic such
as email and text programs.
DELIVERY EXPANSION MARKETING LIBRARY FIELD SUPPORT
Papa Murphy’s helps coordinate with
various third party delivery companies
on your behalf to ensure customers
have as many options as possible to
get our pizza.
Papa Murphy’s hosts a vast library
with dozens of pieces of approved
marketing collateral that you can
“fill in the blanks” and then use to
help drive your business whether it is
a print piece or certificates for
teacher appreciation.
You will be assigned a field
marketing representative whose
job is to help you and your fellow
franchisees leverage your marketing
spend effectively through coordination
with local agencies, co-op meetings
and sharing best practices in local
store marketing.
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OPERATIONAL SUPPORT
OPERATIONS
STANDARDS AND FOOD
SAFETY
REAL-TIME
INFORMATION
IN-STORE TRAINING
AND TOOLS
NEW OWNER/
NEW STORE SUPPORT
FIELD OPERATIONS
SUPPORT
All of the information
you need to make,
store, and sell our
products safely are
included in the
Operational Excellence
Standards Manual
(OESM). As a national
franchise brand, it is
important to follow
standards to have
consistent quality and
brand image across all
of our locations.
Papa Murphy’s has a
dedicated franchisee
Intranet withvaluable
information and tools,
as well as a weekly
operations blast to
help you prepare for
upcoming events. In
addition, the Pulse
Realtime application,
enabled by NCR, allows
you to get real-time
data on store
performance.
The operations team
produces job aids and
manuals to help train
employees on all
operational tasks,
and provide best
practices and
scripting for cus-
tomer service to drive
additional sales.
The operations team is
especially committed
to helping you get
started and will
dedicate in-person
resources as needed for
new storeopenings, ownership
transfers or other special events.
Each store is assigned a
district business leader is
who your dedicated
first point of contact.
Your district business
leader will help
conduct store visits
and meetings
focused on helping
you be successful,
including an annual
business review.
Operations is the heart of any retail business and Papa Murphy’s Operations Team is hard at work making sure our franchise owners
are prepared to serve our customers with speed, convenience, quality and safety. Key areas of operations support include:
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FRANCHISE DISCOVERY PROCESS
SIGNINGSend the Franchise Fee
Sign the Agreement
You’re ready for
Phase 1 Training!
CANDIDATE
APPLICATIONWe want to get to know you.
What’s your background?
Do you have business partners?
What questions can we help you with?
INTRODUCTORY CALLThank you for your inquiry!
Let’s get started.
Our Development
Specialist will have a brief
conversation with you
about market availability,
time-frame, and owner
qualifications.
PHONE INTERVIEW
WITH DIRECTOR
FDD – GET TO KNOW PAPA MURPHY’SThis phase of discovery is a deeper dive
into reviewing our Franchise Disclosure Document (FDD)
DUE DILIGENCE:CONNECT WITH OUR OWNERS
Hear about their experience
and advice.
DISCOVERY DAYVisit our Support Center in
Vancouver, WA. Meet key support teams and experience
more of our culture.
FINANCIAL ASSET VERIFICATIONFor a smooth transaction to financing the investment, we’ll
need to verify your financial strength.
WELCOME TO DISCOVERY: You’re learning about our brand, concept, and what it takes to be a franchise owner
to help determine if we are mutually a strong fit. Our experienced Franchise Director and support members will
guide you through the discovery steps and educate you about the business aspects of our franchise system.
REQUEST FRANCHISE
AGREEMENT
COMMITTEE APPROVALReady to sign the
Franchise Agreement?
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FRANCHISE DISCLOSURE DOCUMENT (FDD)
The franchise disclosure document (FDD) is a legal disclosure document that the Federal Trade Commission (FTC) requires franchisors to
provide to individuals interested in buying a U.S. franchise as part of the pre-sale due diligence process. It contains information essential
to potential franchisees about to make a significant investment. There are 23 Items that each franchisor company must update and
report each year.
Here is an overview along
with a brief description of
each item:
ITEM 1
THE FRANCHISORDescription of the company and
its history
ITEM 2
BUSINESS EXPERIENCEProfessional information about the
officers, directors and executives
ITEM 3
LITIGATIONCurrent and past litigation for the
franchisor
ITEM 4
BANKRUPTCYThe franchisor and any mgmt.
with bankruptcy
ITEM 5
INITIAL FEESFactors that determine the
amount of fees
ITEM 6
OTHER FEESOther recurring fees or payments
ITEM 7
INITIAL INVESTMENTExpenditures to establish the
franchise
ITEM 8
RESTRICTION ON PRODUCTSRestrictions regarding the source
of products or services
ITEM 9
FRANCHISEE’S OBLIGATIONSA reference table of source in the
franchise agreement
ITEM 10
FINANCINGTerms & conditions of any offered
financing programs
ITEM 11
FRANCHISOR’S ASSISTANCEServices that the franchisor
provides to the franchisee
ITEM 12
TERRITORYDescription of any exclusive
territory
ITEM 13
TRADEMARKSTrademarks, service and trade
names
ITEM 14
PATENTS, COPYRIGHTSHow the patents & copyrights can
be used by the franchisee
ITEM 15
OBLIGATIONS TO PARTICIPATEDescription of franchisee’s
obligation to participate
ITEM 16
SELLING RESTRICTIONSRestrictions on goods & services
that may be offered
ITEM 17
RENEWAL, TERMINATION,
TRANSFERRights & restrictions of franchisee
for renewal, termination, transfer
or disputes
ITEM 18
PUBLIC FIGURESAmount a public figure is paid
ITEM 19
FINANCIAL PERFORMANCEHere the franchisor is allowed but
not required to provide unit
financial performance
ITEM 20
FRANCHISEE INFORMATIONLocations and contact
information of existing franchisees
ITEM 21
FINANCIAL STATEMENTSAudited financial statements for
the last 3 years
ITEM 22
CONTRACTSList of agreements the franchisee
is required to sign
ITEM 23
RECEIPTSProspective franchisee’s
acknowledgement of receipt
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DISCLOSURE MEETING
As part of your Discovery Process with Papa Murphy’s, our Franchise Sales Director will
schedule an in-depth Disclosure Meeting with you to discuss the FDD so you have an
opportunity to ask questions and get more clarification about our franchise program.
The Disclosure Meeting is not binding you to any commitment. It simply provides you with
more of the detail you need to understand in your due diligence efforts.
Once you have submitted the Candidate Profile application and you’ve had an
introductory phone call with our Director, if both you and the Director are in agreement to
move forward, the Disclosure Meeting would then be scheduled. You will receive an
electronic copy of the FDD prior to the meeting so you can become familiar with the
document and have time to prepare your questions about our program.
In most cases, our Director will be able to travel to your market area and schedule the
meeting in a public meeting space (restaurant, hotel lobby, etc). The other alternative
would be to conduct the meeting by phone or conference call if you have additional
partners that want to be involved.
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REACHING OUT TO EXISTING FRANCHISE OWNERS
Making validation calls is an important part of reviewing our franchise system. By interviewing current
franchisees, you’re getting an honest, inside look into our system’s culture, advantages, and challenges. This
is a great way to gain perspective and set expectations of what owning and operating a franchise might
be like.
IT’S UP TO YOU TO CHOOSE WHO YOU WANT TO TALK TO.
We suggest interviewing 5-10 current franchise owners, including a variety of ownership levels; some that have a single unit, others
that have multiple units. Consider both new owners in the system for a year or less, and others that have many years of experience to
get a different perspective. We are restricted from giving you specific owners to interview but if you wish to speak with owners that
meet a certain criteria or background similar to your own, we are able to identify a list based on your criteria.
EXAMPLE QUESTIONS THAT YOU MIGHT WANT TO ASK:
• What was your biggest challenge in your first year, and what’s currently your biggest challenge?
• How has being a franchisee benefited you, and what are the drawbacks?
• What’s your work-life balance like?
• How long were you in business before you reached breakeven?
• What separates higher performers from lower performers?
• What do you think is the biggest mistake that a first-year franchise owner can make?
• Do you feel well supported by the franchisor?
• How is the communication system between the Support Center and franchisee system?
When you’re ready to start your Franchisee Validation process, select a list of franchise owners from the FDD that you would like to
interview and give that list to the Franchise Sales Director. The Director can then confirm the owner’s contact information for you while
also giving the owner assurance that you are a valid candidate in the discovery process and not an outside competitor trying to gain
information. Once you contact the owner, request a preferred day/time that you can connect so they can clear some time in their
schedule for your conversation.
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DISCOVERY DAY
WHAT TO EXPECT
• Come prepared with questions
The more you engage, the better our team
understands your vision for wanting to be a franchise
owner.
• Meet other candidates
You will likely be joined by other candidates also completing their due diligence.
• Consider it a two-way interview
This franchise opportunity needs to be a good fit for
both you and our franchise system.
• Discovery Day is not overly formal
While discussion is business professional, it’s a casual
atmosphere.
• You will need PMI approval to move forward.
In addition to your decision to move forward or not,
approval is also required from our Senior Leadership
team.
TYPICAL AGENDA
• Company Vision with Leadership Team
• Development Overview• Marketing Strategy Overview
• Operations Support Overview
• Q&A
We take great pride in not only our amazing product but also in our brand’s culture and having owners that are the right fit to help
grow our system is critical for the systems success. Please keep in mind, completing the Discovery Day visit is a required step in the
approval process. We plan for a Discovery Day at least once a month throughout the year.
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NOTE: As of 2020, we are conducting Discovery Day Meetings virtually by web conference.
FINAL APPROVAL/SIGN FRANCHISE AGREEMENT
After Discovery Day, you should have answers to the questions that you need to make a decision if you are ready to move forward with
signing a franchise agreement to complete the first phase of training with the 3-day In Store Experience. Here’s what to expect next….
ASSET
VERIFICATION
Notify the Franchise Director that you are
ready to move forward. You will then get
an introduction to our third party vendor
that will work directly with you to collect
financial documentation so they can
validate your financial strength for our
approval file.
SUBMIT
FRANCHISE
FEE
The Franchise Fee (or Transfer Fee)
payment can be made by check
or wire transfer. Please advise the
Franchise Sales Director on your
preferred method and further
instructions will be provided.
CONFIRM
OWNERSHIP
If you have registered an entity and would
like the franchise agreement signed by
that entity, provide us the detail along
with the final ownership percentage
breakdown of each partner involved. If
you do not have an entity registered or
plan to at a later time, you can sign as
individual(s) and assign the franchise
agreement to the entity at a later time.
COMPLETE
TRAINING
PROGRAM
Our support team will work with you
closely to schedule the location and
timing of your in-store training as well
as confirm your space at the next
available NCR/Foundations Class.
SIGN
FRANCHISE
AGREEMENT
All of our legal documents are executed
via our DocuSign electronic signature
system. Each partner involved on the
franchise agreement, will receive an email
link to log-in and complete their electronic
signatures.
WELCOME TO
PAPA
MURPHY’S!
With the training program successfully
completed, our Franchise
Development and Operations team
can provide guidance on final details
in order to complete the transfer of
ownership. A transfer date can be
identified and the Operations team
will be your in-market support for a
smooth transition,
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© Papa Murphy’s
Int’l 2019
Vancouver,
WA
We hope this Guide
provided you with helpful
information as you begin
to explore the Papa
Murphy's franchise
opportunity further.
Thank you for considering
Papa Murphy's, we hope
our brand is the right fit for
you!
We're always here to
help:
