Papa John’s signs biggest franchise deal in its history
Papa John’s International is going big in one of the world’s fastest-growing pizza delivery markets.
The company announced a partnership with FountainVest Partners, one of Asia’s leading independent private equity firms, to open more than 1,350 new stores across South China by 2040. The franchisee development agreement, the biggest in Papa Johns’ history and the largest master franchise deal announced in the pizza industry in recent years, is expected to greatly expand the company’s footprint in China.
FountainVest has also purchased a majority stake in the current Papa John's franchisee CFB Group, which owns and operates approximately 160 restaurants in Shanghai and across southern China. The addition of a new franchisee partner to the brand begins another strong year of development activity for Papa John's, following last year’s major international and domestic development deals, with accelerating store openings across all markets.
Through the first three quarters of 2021, Papa John's sustained its strong momentum from the prior year, delivering nine quarters of positive sales growth and significantly accelerating unit growth. In November, the company debuted a new restaurant design to provide customers with better pick-up options – in the drive-thru, at “Drive-Up Pick Up” and inside at the pick-up counter, which now includes a self-service option that allows customers to quickly grab their order without waiting in line.
“This partnership with FountainVest marks another major milestone in achieving Papa John's global growth potential, reflecting both the scale of our brand’s global opportunity and the quality of franchisees that are investing in our future,” said Rob Lynch, president and CEO of Papa John’s. “Our new development agreement with FountainVest alone stands to grow Papa John's current global unit count by 25%.”
Since 2007, FountainVest, a long-term oriented private equity firm, has focused on investing in businesses that benefit from the rising aspirations of the expanding Chinese middle class by partnering with industry leaders and executing relevant high-growth transactions.
“At FountainVest, our investment process begins by identifying growth-oriented, industry-leading enterprises that are aligned with the growth dynamics of the Chinese marketplace,” said Andrew Huang, managing director of FountainVest. “Papa John's premium position offers an attractive opportunity in the QSR sector, which has already been proven in China and which we believe will continue to thrive.
Papa John's is headquartered in Louisville, Ky., and is the world’s third-largest pizza delivery company with more than 5,500 restaurants in 50 countries and territories as of Sept. 26, 2021. In recent years, the company has entered 15 new countries, including Spain, Portugal, Germany, Cambodia, Pakistan, France, and Poland.