Papa Johns 2010 Annual Report Download - page 15

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traditional Papa John’s restaurants, enabling Papa John’s to offer nationwide online and mobile web
ordering to our customers.
Joint Ventures. We operate 127 Company-owned restaurants under two joint venture arrangements.
Under the first arrangement, we own 70% of an entity operating 52 Papa John’s restaurants located in
Virginia and Maryland. Under the second arrangement, we own 51% of an entity operating 75 Papa
John’s restaurants located in Texas. We will continue to evaluate further joint venture arrangements on
an individual basis as opportunities arise.
Hours of Operation. 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. Carryout hours are generally more limited for late night, for security purposes.
International Operations
The international reporting segment operations structure consists of international business managers
responsible for supporting one or more franchisees. The international business managers report to one of
three regional vice presidents who report to the Senior Vice President, International. Various support
functions for the International business such as marketing, supply chain, research and development and
quality assurance, are managed centrally as global functions, with regional field support personnel as
appropriate. The Company owns and operates restaurants in Beijing/North China (21 units at December
26, 2010) and has a local management structure in place to support those operations.
Franchise Program
General. We continue to attract franchisees with significant restaurant and retail experience. We consider
our franchisees to be a vital part of our system’s continued growth and believe our relationship with our
franchisees is good. As of December 26, 2010, there were 3,034 franchised Papa John’s restaurants
operating in all 50 states, the District of Columbia, Puerto Rico and 32 countries. As of December 26,
2010, we have development agreements with our franchisees for more than 300 additional domestic
franchised restaurants, the majority of which are committed to open over the next five years, and
agreements for approximately 1,200 additional international franchised restaurants, the majority of which
are scheduled to open over the next eight years. 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. During 2010, 312 (169 domestic and 143 international) franchised Papa John’s restaurants
were opened.
Approval. Franchisees are approved on the basis of the applicant’s business background, restaurant
operating experience and financial resources. We seek franchisees to enter into development agreements
for single or multiple restaurants. We require each franchisee to complete our training program or to hire
a full-time operator who completes the training and has either an equity interest or the right to acquire an
equity interest in the franchise operation. Outside the United States, we will allow an approved bonus
plan to substitute for the equity interest.
Domestic 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. Substantially all existing franchise agreements have an initial 10-year term
with a 10-year renewal option. We have the right to terminate a franchise agreement for a variety of
reasons, including a franchisee’s failure to make payments when due or failure to adhere to our policies
and standards. Many state franchise laws limit the ability of a franchisor to terminate or refuse to renew a
franchise.