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View Diary: Don't Worry "Papa John": We Understand (191 comments)

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  •  CH - Papa John's had a big buyback program (1+ / 0-)
    Recommended by:
    RDemocrat

    in 2006-2008 when the stock was very cheap. They haven't been buying back any stock since 2008. The total interest expense is under $2 million a year, not much on a company with $1.2 billion in revenues.

    I understand that corporate Papa John's would have low margins because they are primarily collecting fees from franchisees. However, I would be shocked if the net, after tax, profit margin for any pizza place is 25-35%, that would be extraordinarily high for any restaurant.  

    "let's talk about that"

    by VClib on Tue Jan 29, 2013 at 09:39:22 PM PST

    [ Parent ]

    •  Oh, not at all (1+ / 0-)
      Recommended by:
      VClib

      I spent 10 years in the restaurant industry.  If you've got solid volume, control your food costs, do your regular cleaning and maintenance, you can pull 25% easy.  I worked in one where our profit margin was 40%.

      The problem is most restaurant owners think it's an easy business, don't do their homework, really don't know how to train employees in hospitality, don't take the time to understand the regulations, buy shoddy equipment....it goes on and on.  There's lots of ways to screw up a restaurant, but with effort and expertise a 25% profit margin is quite doable.

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