By Dennise Williams, Staff reporterANOTHER FAST food restaurant is looking to sink its teeth into the Jamaican quick service food market.
Papa John's pizza, a take-out and delivery restaurant, has set up links in Jamaica through its agent U.S. Commercial Services located at the Mutual Life Towers on Oxford Road, St. Andrew.
The company is actively seeking applications for franchisees. According to the company, "Papa John's International is the third largest pizza company in America. At December 28, 2003, there were 2,790 Papa John's restaurants (570 company-owned and 2,220 franchised) operating in 49 states and 14 international markets."
The entrance into Jamaica is line with the published intention of the company to have a strong international presence.
The company has locations in spots as diverse as Bahamas Greece, Mexico, Canada, Saudia Arabia, China and Honduras. Interestingly, in 1994, Pizza Hut co-founder, Frank Carney, became a Papa John's franchisee. However, on the local scene, Wednesday Business was met with stiff resistance by existing pizza franchisees and indigenous pizza restaurants when asked about the state of the Jamaican pizza market. There were not any numbers forthcoming in terms of sales and answers were, for the most part, cagey.
PIZZA FAST BECOMING
A JAMAICAN DELITE
At Dominos Pizza, which has been in Jamaica since 1997, we were informed that, "Jamaica is a chicken society. But pizza is coming into its own. Jamaica is finally accepting pizza." However, while not giving up its sales figures, Pizza Delite, a locally owned firm stated that, "pizza is very popular, but business is up and down." In hopes to find just the right individuals, Papa John's will be having interviews with prospective franchisees in the last week of February. States the company in local advertisements, "as our rapid international expansion continues, we are seeking a highly qualified franchisee to develop Papa John's restaurant in Jamaica."
Wednesday Business was able to ascertain that the successful company or individual will be subject to a complete background check and will be required to have recommendation from their bank.
Additionally, a minimum capital base of US$500,000 to US$1 million will be vital, for the initial investment to build a typical Papa John's restaurant is about US$200,000 net of freight and duties on equipment.
FRANCHISE FEES
Information gathered reveals that International Franchise Fees are broken down as follows:
The initial franchise fee is US$25,000 per unit for a standard Papa John's restaurant.
An ongoing management service fee (or royalty) of five per cent of net sales is due on a monthly basis
Papa John's requires that a minimum of six per cent of net monthly sales be spent by each franchisee for marketing purposes, as follows:
5.5 per cent spent on local marketing; and
0.5 per cent is paid to a global marketing fund.
The company does not disclose the return on investment, a very important consideration. They state, "We do not provide earnings claim information. The amount of profit or loss is dependent on a number of factors, including the ability of the franchisee to manage the business, drive sales volume and control operating costs. We encourage prospective franchisees to conduct significant due diligence during the discovery process and contact existing franchises with questions regarding marketing, finances, sales volumes, operations, etc."
Note that the company does post the sales records of existing franchisees. According to Papa John's, in 2001, their Cancun, Mexico franchisee set a "new national sales record with US$87,589 in sales for one week."
One highlight for Jamaica is that, according to published reports, the company states that, "in each of our international markets, Papa John's strives to source food products and supplies in country whenever possible. We have developed numerous partnerships with suppliers in each country, ensuring that our international franchisees receive the highest-quality ingredients and supplies available at the best possible prices."
