Franchise Talk

Papa John’s Could Ante Up To Spur International Growth

April 21st, 2006 | Author: Jack

Papa John’s International is looking for the first time at investing its money in markets outside the United States and Great Britain to speed up its development abroad.

“International is going to be a big story for us,” Nigel Travis, Papa John’s president and chief executive, said yesterday during the pizza company’s annual shareholders’ meeting at its Louisville headquarters.

The Papa John’s international system has 325 restaurants, and the company says it has contractual agreements for 800 more. But outside Britain, all the stores are franchised.

Franchising is the company’s primary business, Travis said, but there also are advantages to corporate investment in international markets.

“It’s sometimes faster. Franchisees … have to get to know the system. We know the system,” he said. “Obviously we have to get to know the country, but in many of these markets we’ve put a lot of people on the ground. They know both the system and the country.”

Company development also can spur franchisees to open more stores.

“To put some corporate development in China … would be good because it would encourage franchisees to sign up. It would encourage our partners … there to do more,” Travis said. “Franchisees always feel more comfortable when you put your own money where your mouth is.”

In Mexico, the company recently shed its franchisee and closed all of its stores. “I think Mexico’s a possibility” for corporate development, Travis said.

Papa John’s hasn’t made a major overseas investment since 1999, when it bought the Perfect Pizza chain in Britain for $32 million. It sold what was left of it last month for $13 million.

But Papa John’s has experience now, Travis said, with nearly 30 restaurants in China and in Russia, where an outlet topped $1 million in annual sales. The average for its company-owned U.S. stores is $818,000.

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