To assign a valuation multiple for Papa John’s Pizza, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the pizza franchise industry’s selling price multiples to determine Papa John’s resale value.
Under $5 Million Net Sales
- Estimated Selling Price = Net Sales * 0.34
Over $5 Million Net Sales
- Estimated Selling Price = Net Sales * 0.86
When you go to sell a Papa John’s franchise based on the median multiple of .34 and net sales in 2021 of $1,101,127, it would sell for $374,383. This is lower than the midpoint investment of $494,530.
However, as an owner of multiple Papa John’s franchises, you do have the ability to make a massive profit. Owners in the Pizza Industry with over $5 million in sales have a median multiple of .89. So, if you had 5 Papa John’s franchises this would be ~$5,505,635 in sales. They would sell for $4,900,015. This is a massive profit on the estimated initial investment of $2,472,650.
The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators. Below are some examples of Papa John’s franchises for sale: