Papa Johns 2001 Annual Report Download - page 12

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manager completes our management training program and on-going development programs in which
instruction is given on all aspects of our systems and operations. The programs include classroom
instruction and hands-on training at an operating Papa John’s restaurant or at Company-certified training
centers. Our training includes new team member orientation, in-store and delivery training, core
management skills training, new product or program implementation and ongoing developmental
programs.
Point of Sale Technology. Point of sale technology (our proprietary PROFIT SystemTM) is in place in
substantially all Company-owned and franchised restaurants. We believe this technology facilitates faster
and more accurate ordertaking and pricing, reduces paperwork and allows the restaurant manager to better
monitor and control food and labor costs. We believe the PROFIT System enhances restaurant-level
marketing capabilities through the development of a database containing information on customers and
their buying habits with respect to our products. Polling capabilities allow us to obtain restaurant-
operating information, thereby improving the speed, accuracy and efficiency of restaurant-level reporting.
Reporting. Managers at Company-owned restaurants evaluate daily reports of sales, cash deposits and
operating costs. Physical inventories of all food and beverage items are taken nightly. Our area
supervisors prepare weekly operating projections for each of the restaurants under their supervision.
Hours of Operations. Our domestic restaurants are open seven days a week, typically from 11:00 a.m. to
12:30 a.m. Monday through Thursday, 11:00 a.m. to 1:30 a.m. on Friday and Saturday and 12:00 noon to
11:30 p.m. on Sunday.
Franchise Program
General. We continue to attract many franchisees with significant restaurant experience. We consider our
franchisees to be a vital part of our system’s continued growth and believe our relationship with our
franchisees is excellent. As of December 30, 2001, there were 2,118 franchised Papa John’s restaurants
operating in 47 states, the District of Columbia, and nine international markets, and 190 franchised
Perfect Pizza restaurants operating in the United Kingdom. We have development agreements with our
domestic franchisees for approximately 312 additional franchised restaurants committed to open through
2006 and agreements for 320 additional international franchised restaurants to open through 2006. There
can be no assurance that all of these restaurants will be opened or that the development schedule set forth
in the development agreements will be achieved. Formal development agreements for franchised Perfect
Pizza restaurants do not exist and we do not plan to open any new Perfect Pizza units. Our plan is to
attract new franchisees, as well to work with existing franchisees, to open new Papa John’s restaurants in
the United Kingdom. During the 2001 fiscal year, 187 (139 domestic and 48 international) franchised
Papa John’s restaurants were opened, and two Perfect Pizza franchised restaurants were opened.
Approval. Franchisees are approved on the basis of the applicant’s business background, restaurant
operating experience and financial resources. We generally seek franchisees that will enter into
development agreements for multiple restaurants. We seek franchisees that have restaurant experience or,
in the case of franchisees that do not have restaurant experience, we require the franchisee to hire a full-
time operator who has either an equity interest or the right to acquire an equity interest in the franchise
operation.
Development and Franchise Agreements. We enter into development agreements with our domestic
franchisees for the opening of a specified number of restaurants within a defined period of time and
specified geographic area. Under our current standard development agreement, the franchisee is required
to pay, at the time of signing the agreement, a non-refundable fee of $5,000 per restaurant covered by the
development agreement. This amount is credited against the standard $20,000 franchise fee payable to us