Papa Murphy's Uses Non-Restaurant Operations and Restaurant-Type Scalability to Spur Growth

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Papa Murphy's Uses Non-Restaurant Operations and Restaurant-Type Scalability to Spur Growth
Papa Murphy's Uses Non-Restaurant Operations and Restaurant-Type Scalability to Spur Growth
The nation's largest take-and-bake pizza concept is looking to open 115-120 new stores in 2016.

Papa Murphy’s, the originator of the take-and-bake pizza franchise concept, is enjoying consistent and steady growth, capturing future multi-unit operators who crave the lure of restaurant ownership but want to avoid the stress of restaurant operations.

“Prospective franchise investors are flooded with complex restaurant investment opportunities that have limited scalability,” said Jayson Tipp, chief development officer and senior vice president of technology for Papa Murphy’s. “We have eliminated the complexity of restaurant ownership by focusing on the simplicity of business operations, offering a product that happens to sell take-and-bake pizza. We don’t compete in the pizza category, we compete in the business of food category.”

Simple is the secret to success for Papa Murphy’s, as the brand has positioned itself as the first “non-restaurant/restaurant” business opportunity. With no baking required in-store and no freezers on site, the initial investment is significantly lower than traditional restaurant concepts with clutter cut and complexity lowered in the kitchen. Because of the brand’s streamlined operations (no cooking, no delivery and shorter hours) it keeps labor costs down and that low overhead allows Papa Murphy’s to offer its signature, freshly-made products at prices significantly lower than competitors’ straight-out-of-the-oven pizza. From an investment standpoint, simplicity wins, as store footprints are small in space, but efficient, maximizing return for franchise owners, with square footage primarily dedicated to pizza creation.

Papa Murphy’s unique and simple positioning has helped the brand garner the attention of prospective investors. Because the brand has worked to differentiate itself from the crowded pizza space, it stands apart from other restaurant concepts in a distinct and clear way. With more than 1,500 locations across 38 states, the brand is continuing to expand its presence in new and existing markets, concentrating initially on targets in the Midwest and Southeast, with a goal of opening an additional 115-120 units in 2016. Much like its business model, Papa Murphy’s growth tactic is also simple: expand deeply within one market at a time to build critical mass and awareness in order to amplify the power of the brand.

“We realize that there is a strong correlation between average weekly sales and annual volumes when compared to the number of existing stores that we have in the market,” Tipp said. “The more we penetrate a territory, the more our sales accelerate, so we’re building new success around our existing market share.”

Papa Murphy’s practical concept is one proven to work. Already the largest take-and-bake pizza chain in the United States, and the fifth-largest pizza chain overall, the brand’s success goes far beyond impressive growth. For five straight years, Papa Murphy’s has been ranked the No. 1 Pizza Chain by Nation’s Restaurant News’ Consumer Picks. Market Force Information’s annual quick-service-restaurant study also recently ranked the brand as America’s favorite pizza chain, outperforming all other major pizza giants, including Papa John’s, Domino’s and Pizza Hut.

“Papa Murphy’s has crafted a competitive edge by offering franchise owners a better opportunity in a brand new segment in pizza, restaurant and business,” said Ken Calwell, CEO of Papa Murphy’s. “Because we operate more like a small-scale specialty grocery store, our franchise owners don’t need extensive restaurant operating experience. There are no fryers or ovens and very limited clean up. This means a lower investment, a lower break-even point and lower complexity. Ultimately, all of that translates into a much more attractive franchise option.”

After anchoring the brand around the simplicity of non-restaurant operations, but still offering competitive restaurant scalability, Papa Murphy’s has now turned its focus toward upgrading its technology to enable precision marketing and increased sales. This includes the recent launch of an online ordering and e-commerce website. The brand’s primary goal is to migrate orders from call-in and push them online as a growth lever. Since introducing its first digital commerce platform in early 2016, Papa Murphy’s has already seen 20-25 percent larger orders, on average, from consumers who order online.

Papa Murphy’s has opened 27 restaurants in the first quarter of 2016 and plans to open an additional 88-93 by the end of 2016.

“We are focused on intelligent growth for our franchisees and technology is one place we can help them leverage our distinctive product that consumers come back to time and time again,” Tipp said. “Using our simple, proven business model and our strong value proposition, we’re poised for a historic growth push that will cement Papa Murphy’s as America’s favorite pizza for decades to come.”

To learn more about franchising with Papa Murphy's, click here.