How to Finance a Papa Murphy’s Franchise: No-Oven Store Costs
By Anthony Cornella
A Papa Murphy’s franchise loan finances a different kind of pizza business: a take-and-bake store with no ovens and no dining room, where guests carry home a fresh, unbaked pizza and bake it themselves. That model shapes nearly every number a lender looks at, from build-out and equipment to staffing and working capital.
This article covers what Papa Murphy’s publishes about fees and owner requirements, how its store format affects costs, what the brand’s SBA Franchise Directory listing means, and how buyers typically finance a new store, a resale or a second location.
US Professional Funding is not affiliated with, sponsored by or endorsed by Papa Murphy’s; the name is used only to describe the business. Figures from the franchisor’s disclosure document and website can change, loan programs and terms vary by lender and borrower, and every loan is subject to review and approval. Nothing here is legal, tax or investment advice, and buyers should review the current Franchise Disclosure Document (FDD) and franchise agreement with a qualified franchise attorney and accountant.
Papa Murphy’s Franchise Loan at a Glance
- Franchisor: Papa Murphy’s International LLC, headquartered in Vancouver, Washington.
- Initial franchise fee: $15,000 to $25,000.
- Royalty: 5% of weekly net sales.
- Brand marketing fee: 2% of weekly net sales.
- Minimum liquid capital: $125,000 for a new store; Papa Murphy’s says this may be lower for a resale with a lower investment.
- Minimum net worth: $350,000.
- Store size: about 1,200 to 1,400 square feet, with no ovens or dine-in.
- Staffing: an average of 12 to 17 employees, with 3 to 5 crew members per shift.
- System size: nearly 1,000 locations across the United States, Canada and the UAE.
- Financial performance: the franchisor publishes information drawn from Item 19 of its FDD.
- SBA Franchise Directory: listed as “Papa Murphy’s Take ‘N’ Bake Pizza” (code S1274), with no additional directory notes.
What Is Papa Murphy’s?
Papa Murphy’s was formed in 1995 through the merger of two take-and-bake pizza companies and is headquartered in Vancouver, Washington. The franchisor today is Papa Murphy’s International LLC, and the brand reports nearly 1,000 locations across the United States, Canada and the UAE.
The concept is simple: guests choose or customize a pizza, crew members build it fresh on the make line, and guests take it home to bake. There are no pizza ovens and no dine-in seating in the store. Papa Murphy’s describes its stores as about 1,200 to 1,400 square feet.
Why lenders view Papa Murphy’s the way they do. Lenders generally see a small-footprint retail food business with a lighter equipment package than an oven-based pizza restaurant, modest staffing and a well-established system with an SBA directory listing. Their focus is on the site, the local trade area, the owner’s management experience and whether projected sales comfortably cover rent, labor, the royalty and marketing fee and debt service.
How the take-and-bake format changes the financing math. Without ovens or a dining room, the store avoids some of the most expensive restaurant components: large hood and fire-suppression systems over pizza ovens, dining furniture and restroom build-outs sized for seated guests. The money goes instead into refrigeration, the make line, prep areas and the retail counter. That generally means a smaller equipment loan and a build-out focused on cold storage and food prep rather than cooking.
Papa Murphy’s Franchise Costs
Papa Murphy’s directs candidates to Item 7 of its most recent FDD for a full breakdown of start-up costs. Its franchising site lists the investment categories a new store needs to fund, which give a clear picture of how a loan request is built.
Initial franchise fee. Papa Murphy’s lists an initial franchise fee of $15,000 to $25,000. The fee is generally paid when the franchise agreement is signed and is typically funded from the buyer’s equity or included in the overall project budget.
Real estate and build-out. Most stores are leased storefronts in neighborhood shopping centers. The franchisor’s cost breakdown includes lease and utility deposits and payments, leasehold improvements, stamped architectural drawings and an as-built survey. Leasehold improvements are the largest and most variable line item, driven by the condition of the space, local construction costs and any landlord tenant improvement allowance.
Equipment and opening package. Papa Murphy’s groups equipment and supplies, decor, cabinets, the point-of-sale system and smallwares into an opening package. Because there are no ovens, the package centers on refrigeration, the make line and prep equipment.
Signage. Exterior and interior signage is a separate Item 7 category.
Opening inventory and supplies. Initial food inventory, materials and supplies.
Initial marketing. The franchisor’s breakdown includes initial marketing fees and expenses covering the first six months, which helps a new store build awareness in its trade area.
Training. Costs for operations in-store training, enterprise solutions training and the foundations class, plus travel and living expenses for those programs and for an in-store compatibility check, and employee training.
Early operating costs. The breakdown includes three months of franchise premises rent, insurance, bookkeeping and payroll services, along with additional funds, working capital and miscellaneous expenses for the first three months.
Total investment. Papa Murphy’s franchising pages present more than one total investment range, and the line items shown on its cost page do not add up exactly to the stated total. Rely on the Item 7 table in the FDD you receive for the total and each line item, and make sure your loan request reconciles to it. A summary of the categories to fund:
- Initial franchise fee
- Lease and utility deposits and payments
- Leasehold improvements
- Signs
- Stamped architectural drawings and as-built survey
- Opening package: equipment and supplies, decor, cabinets, point-of-sale system and smallwares
- Miscellaneous development service fees
- Opening inventory, materials and supplies
- Initial marketing fees and expenses for six months
- Franchise premises rent for three months
- Owner and employee training, with travel and living expenses
- Insurance and bookkeeping or payroll services for three months
- Additional funds, working capital and miscellaneous expenses for three months
Ongoing Fees and How They Affect Your Loan
Royalty. Papa Murphy’s lists a royalty of 5% of weekly net sales. Because it is calculated and paid weekly, cash flow planning should account for a steady weekly outflow rather than a monthly lump sum.
Brand marketing fee. The brand marketing fee is 2% of weekly net sales. Read Item 6 for any local marketing spending requirements on top of the fund contribution.
Other fees. Item 6 also lists technology, transfer, renewal and other fees. Model each one that applies.
How lenders factor these costs in. Lenders start from projected weekly sales, subtract food and packaging costs, labor, rent and the combined royalty and marketing fee, and then test whether remaining cash flow covers debt service with a cushion. For a resale, lenders use the store’s actual fee payments from its financial statements. Use our SBA loan calculator for early payment estimates, which are for planning only and are not an offer or approval.
Franchisor Requirements for New Owners
Papa Murphy’s publishes its financial requirements and the skills it looks for:
- Liquid capital: at least $125,000 for a new store. Papa Murphy’s says this may be lower for a resale if the investment is lower. Qualifying liquid assets include cash and accessible investments such as bank accounts, stock funds and eligible retirement accounts.
- Net worth: at least $350,000.
- Skills: strong entrepreneurial skills, experience developing and leading a diverse team, a service mindset, appreciation for a proven business model and a passion for the product.
- Financing: the ability to obtain financing for the initial investment. Papa Murphy’s says financing is available through third-party lenders.
The approval process. Papa Murphy’s describes nine steps: an introductory call with a qualification specialist; a phone interview with a director of development; a disclosure meeting where the FDD is provided and reviewed; due diligence calls with current owners; a virtual education session covering training, operations, marketing and design and construction support; financial asset verification; a final interview where you present your operations plan; signing the franchise agreement and paying the franchise fee; and new owner training.
Training. New owners complete 4 to 5 weeks of in-store operational training and 1 week of the Owner’s Foundation Class.
Because Papa Murphy’s verifies financial strength before awarding a franchise, it pays to line up your financing plan early. Our article on how much franchise you can afford walks through the math.
Ways to Own a Papa Murphy’s
Opening a new store. A Papa Murphy’s franchise loan for a new store is underwritten on projections, the site and lease, and the owner’s experience. Lenders review the build-out budget, equipment package and the working capital in Item 7. Read more about restaurant start-up financing.
Buying an existing store. Papa Murphy’s notes that the liquid capital requirement may be lower for a resale when the investment is lower. A resale lets a lender underwrite actual sales and expenses, which can make financing more straightforward. The transfer requires the franchisor’s approval under Item 17. See our article on buying a franchise resale.
Adding locations. Owners who succeed with one store often add a second or third in nearby trade areas, either by building new stores or by buying existing ones.
Financing Options for a Papa Murphy’s Franchise
SBA 7(a) loans. Papa Murphy’s appears on the SBA Franchise Directory, so the SBA 7(a) loan program can finance leasehold improvements, the opening package, franchise fees, working capital and the purchase of an existing store for eligible borrowers. For many first-time owners of a small-footprint store, 7(a) is the primary option.
SBA 504 loans. The SBA 504 program is designed for owner-occupied real estate and long-lived equipment. Because most Papa Murphy’s stores are leased storefronts, 504 is relevant mainly when an owner buys the building.
Conventional term loans. Owners with strong credit, collateral and experience, or groups acquiring several stores, may use conventional business loans. Terms vary by lender and borrower.
Equipment financing. Walk-in coolers, reach-in refrigeration, the make line, prep tables and point-of-sale systems can be financed separately. See our franchise equipment financing and leasing options.
Working capital and lines of credit. Take-and-bake demand can rise around weekends, holidays and big sporting events, and a new store needs funds for payroll and marketing while sales build. A line of credit can smooth those swings. Learn more about restaurant working capital.
Seller financing on resales. A selling owner may agree to carry part of the purchase price. Any seller note would need to be acceptable to the senior lender and is typically subordinate to it, and SBA programs may limit how it is structured.
Veteran owners. Papa Murphy’s highlights veterans as a fit for the brand. Our article on veteran franchise financing covers financing considerations for veterans.
SBA Loans for Papa Murphy’s Franchisees
SBA lending for franchises runs through the SBA Franchise Directory, which lists brands whose franchise documents have been reviewed for SBA eligibility. SBA lenders generally require a brand to appear on the directory before making an SBA-guaranteed loan to one of its franchisees. A listing does not approve any borrower; it simply clears the franchise relationship so a lender can review the request.
Papa Murphy’s listing. Papa Murphy’s is listed as “Papa Murphy’s Take ‘N’ Bake Pizza” under code S1274. The directory does not show any additional notes or conditions for this brand, so the standard franchise documents are eligible for SBA review without special addenda restrictions. Confirm the listing with your lender when you apply, since directory status can change.
Loan size. The SBA 7(a) program maximum is currently $5 million, though program rules can change. A single Papa Murphy’s store typically sits well within that limit, which leaves room for owners who later add locations.
SBA application tips.
- Build a project budget that follows the Item 7 categories in the FDD you receive.
- Document your liquid assets clearly, since Papa Murphy’s also verifies financial strength.
- Prepare a business plan with weekly sales assumptions, labor and the royalty and marketing fee. Our guide to writing a franchise business plan for an SBA loan explains what to include.
- Include your lease or letter of intent, contractor bids and equipment quotes.
How Lenders Evaluate a Papa Murphy’s Deal
Personal credit and financial history. Lenders review credit reports, tax returns and a personal financial statement, and typically require a personal guarantee.
Net worth and liquidity. Papa Murphy’s minimums of $125,000 liquid capital and $350,000 net worth set a floor. Lenders will also look at what remains after the equity injection and whether reserves can carry the store through the first months.
Industry and management experience. Papa Murphy’s looks for owners who can lead a diverse team. Lenders give weight to management experience in food service, retail or any business with hourly staff, plus completion of the franchisor’s training.
Business plan and projections. Projections should use weekly sales, food and packaging costs, the staffing model of 12 to 17 employees, rent, the 5% royalty and 2% marketing fee, and a ramp-up period. Item 19 information can inform assumptions, but lenders will test them carefully.
The FDD and franchise agreement. Lenders review the franchise term, renewal and transfer provisions in Item 17 and confirm that the remaining term on a resale supports the loan term.
Site and lease. Lenders compare the lease term and renewal options with the loan term and look at visibility, parking and neighboring tenants. For a take-and-bake concept, easy access and convenient parking matter because guests pick up and leave quickly.
Historical financials for resales. Expect to provide several years of the store’s profit and loss statements, sales reports and tax returns.
Take-and-Bake Equipment and Store Design
A Papa Murphy’s store is built around cold storage and food prep rather than cooking. Typical equipment includes walk-in and reach-in refrigeration, a refrigerated make line, dough and prep tables, sinks, smallwares, cabinets, decor and the point-of-sale system. The franchisor bundles these items into its opening package.
Why it matters for financing. The absence of ovens and dining rooms keeps the equipment and build-out budget focused. Refrigeration is the most important long-lived equipment, so owners often finance it with terms matched to its useful life and keep cash for working capital.
Staffing. With an average of 12 to 17 employees and 3 to 5 crew members per shift, labor is a central operating cost. Lenders want to see a realistic staffing schedule, especially for weekends and holidays.
Multi-Unit Growth
Many owners begin with one store and add locations as they gain experience. Each additional store needs Papa Murphy’s approval and its own financing.
Financing a second store. Once the first store has operating history, a second Papa Murphy’s franchise loan can be underwritten on that store’s cash flow alongside the projections for the new one. Owners often finance each store separately, which keeps the debt tied to each location’s performance.
Buying existing stores to grow. Acquiring an existing store can add cash flow immediately. Our page on franchise restaurant acquisition financing explains how we approach these purchases.
Real-World Scenarios
A first-time owner opening a new store. A manager with years of retail experience meets Papa Murphy’s liquidity and net worth requirements, completes training and opens a store in a neighborhood shopping center. An SBA 7(a) loan funds the leasehold improvements, opening package and working capital, and the owner contributes equity for the franchise fee.
A buyer acquiring a resale. A buyer purchases an established store from a retiring owner. The lender sizes the Papa Murphy’s franchise loan to the store’s historical results, and the seller carries a small subordinate note.
An owner adding a second store. An owner with a successful first store opens a second nearby. The lender reviews both stores’ combined cash flow and finances the new store’s build-out and equipment.
A veteran entering franchising. A veteran with leadership experience uses savings and retirement assets that qualify as liquid capital and finances the remaining investment with an SBA loan.
Common Mistakes to Avoid
- Relying on a total investment figure that does not match the Item 7 table in the FDD you receive
- Underestimating weekend and holiday staffing needs
- Forgetting that royalty and marketing are paid weekly
- Choosing a site with poor access or parking for a pick-up concept
- Leaving too little working capital for the first months
- Overlooking the remaining franchise term on a resale
For more pitfalls that apply across the industry, read five restaurant loan mistakes to avoid.
Next Steps to Finance Your Papa Murphy’s Franchise
Step 1: Confirm you meet the requirements. Make sure you have at least $125,000 in liquid capital and $350,000 in net worth for a new store.
Step 2: Start the discovery process. Complete the introductory call and interview, then review the FDD with a franchise attorney and accountant.
Step 3: Talk with a financing specialist. Learn how much financing you can support and what documents you will need.
Step 4: Find and evaluate a site or store. Secure a lease letter of intent for a new store, or gather financials for a resale.
Step 5: Build your budget and business plan. Use the Item 7 categories, contractor bids and equipment quotes to build a complete budget and projections.
Step 6: Apply for financing. Submit your loan request with the FDD, franchise agreement, lease or purchase agreement, budget and projections.
Step 7: Complete training and open. Finish in-store training and the Owner’s Foundation Class, then open with a working capital cushion in place.
Papa Murphy’s Franchise Loan FAQs
How much does it cost to open a Papa Murphy’s franchise?
Papa Murphy’s directs candidates to Item 7 of its most recent FDD for the full investment range. Its franchising pages show more than one total, so use the Item 7 table in the FDD you receive as the definitive figure.
What is the Papa Murphy’s franchise fee?
Papa Murphy’s lists an initial franchise fee of $15,000 to $25,000.
What royalty and marketing fees does Papa Murphy’s charge?
The royalty is 5% of weekly net sales, and the brand marketing fee is 2% of weekly net sales.
How much liquid capital and net worth do I need?
Papa Murphy’s requires at least $125,000 in liquid capital for a new store and a net worth of at least $350,000. The liquid capital requirement may be lower for a resale with a lower investment.
Can I get an SBA loan for a Papa Murphy’s?
Yes. Papa Murphy’s is listed on the SBA Franchise Directory under code S1274, with no additional notes. Eligibility still depends on the borrower and the lender’s review.
Does Papa Murphy’s offer financing?
Papa Murphy’s says financing is available through third-party lenders. Review Item 10 of the current FDD for any financing the franchisor offers.
Can I finance equipment separately?
Yes. Refrigeration, the make line and point-of-sale equipment can often be financed through equipment loans or leases, subject to approval.
Can I buy an existing Papa Murphy’s?
Yes, with franchisor approval. A resale lets lenders review actual results, and Papa Murphy’s says the liquid capital requirement may be lower if the investment is lower.
Can a first-time business owner get a Papa Murphy’s franchise loan?
Yes, if Papa Murphy’s approves the candidate and a lender approves the request. Papa Murphy’s looks for team leadership experience, and lenders weigh management experience, liquidity and the business plan.
How big is a Papa Murphy’s store?
Papa Murphy’s describes its stores as about 1,200 to 1,400 square feet, with no ovens or dine-in seating.
How long is training?
New owners complete 4 to 5 weeks of in-store operational training and 1 week of the Owner’s Foundation Class.
How long is the franchise term?
The franchise term and renewal conditions are set out in Item 17 of the current FDD. Lenders compare the remaining term with the loan term, especially for resales.
Does the FDD include financial performance information?
Yes. Papa Murphy’s publishes information from Item 19 of its FDD. Review Item 19 in full, and remember that results at any individual store may differ.
Final Thoughts
Papa Murphy’s take-and-bake model keeps the store small, the equipment focused and the staffing lean, which makes it one of the more approachable pizza franchises to finance. Buyers who meet the liquidity and net worth requirements, reconcile their budget to the Item 7 table in the FDD they receive and plan for weekly fees and weekend staffing give themselves the best chance at a smooth closing.
US Professional Funding helps franchise owners and buyers finance new stores, acquisitions, equipment, working capital and refinancing for established brands. Learn more about our franchise financing and restaurant financing solutions.
