Papa Murphy's franchise cost: investment, fees and the SBA default rate
Items 5, 6 and 7 · Papa Murphy's FDD 2026 · Updated 2026
A Papa Murphy's franchise costs $450,330–$693,450 in total initial investment, according to Item 7 of the brand's FDD (2026), including an initial franchise fee of $25,000 (Item 5); the ongoing royalty is 5% of sales, plus 2% of sales to the advertising fund (Item 6). Franchisees must also spend each month on local marketing the greater of $2,000 or 5 percent of Net Sales; regional cooperative contributions count toward it. On the lending side, Papa Murphy's franchisees defaulted on 7.4% of SBA 7(a) loans approved FY2010–FY2019 (13 of 175), and the average SBA loan to a Papa Murphy's franchisee in that cohort was $252,689.
| Total initial investment (Item 7) | $450,330–$693,450 |
|---|---|
| Initial franchise fee (Item 5) | $25,000 |
| Royalty (Item 6) | 5% of sales |
| Advertising fund (Item 6) | 2% of sales |
| Fee notes (Item 6) | Franchisees must also spend each month on local marketing the greater of $2,000 or 5 percent of Net Sales; regional cooperative contributions count toward it. |
| SBA 7(a) default rate, FY2010–FY2019 | 7.4% |
| Average SBA loan, 2010s cohort | $252,689 |
| Industry | Limited-Service Restaurants |
How much does it cost to open a Papa Murphy's franchise?
Item 7 of the FDD estimates the total initial investment at $450,330–$693,450. It is the franchisor's own estimate of what a new franchisee spends to open one unit, typically the franchise fee, equipment, premises or vehicle costs, opening inventory and an initial working-capital reserve. The low and high ends usually reflect different unit sizes, leasing versus buying, and local costs.
What does the SBA data add?
The federal loan record adds what the FDD cannot: Papa Murphy's franchisees defaulted on 7.4% of SBA 7(a) loans approved FY2010–FY2019 (13 of 175 resolved loans), against the Limited-Service Restaurants industry average of 10.3%, according to U.S. Small Business Administration data with statuses as of June 30, 2026.
Set the investment range against the loans: an average SBA loan of $252,689 against the $450,330–$693,450 investment range says roughly how much of a typical Papa Murphy's opening was debt-financed in the 2010s. The brand page has the year-by-year record and the industry comparison.
What would Papa Murphy's's royalty and ad fund cost at your sales level?
From Item 6: royalty 5% of sales, advertising fund 2%. Royalty and ad fund only · illustration. Other Item 6 fees, fixed or percentage, are not included.
| Annual sales | Royalty | Ad fund | Royalty + ad fund |
|---|---|---|---|
| $250,000 | $12,500 | $5,000 | $17,500 |
| $500,000 | $25,000 | $10,000 | $35,000 |
| $1,000,000 | $50,000 | $20,000 | $70,000 |
| $2,000,000 | $100,000 | $40,000 | $140,000 |
Most SBA default figures published online use loans approved since 2020 — loans that have had six years or less to fail — so those rates are floors, not outcomes. Every rate on this site is computed from the matured FY2010–FY2019 cohort: loans that have been paid in full or charged off, so the result is settled. Loans approved since 2020 are shown as counts so early charge-offs are visible without being mistaken for a rate.
Frequently asked
How much does a Papa Murphy's franchise cost?
A Papa Murphy's franchise costs $450,330–$693,450 in total initial investment, according to Item 7 of the brand's FDD (2026), including an initial franchise fee of $25,000 (Item 5); the ongoing royalty is 5% of sales, plus 2% of sales to the advertising fund (Item 6). Franchisees must also spend each month on local marketing the greater of $2,000 or 5 percent of Net Sales; regional cooperative contributions count toward it. On the lending side, Papa Murphy's franchisees defaulted on 7.4% of SBA 7(a) loans approved FY2010–FY2019 (13 of 175), and the average SBA loan to a Papa Murphy's franchisee in that cohort was $252,689.
What is the Papa Murphy's franchise fee?
$25,000, per Item 5 of the FDD.
What royalty does Papa Murphy's charge?
5% of sales, plus 2% of sales to the advertising fund, per Item 6. Franchisees must also spend each month on local marketing the greater of $2,000 or 5 percent of Net Sales; regional cooperative contributions count toward it.
What is Papa Murphy's's SBA loan default rate?
7.4%: 13 of 175 SBA 7(a) loans approved FY2010–FY2019 to Papa Murphy's franchisees were charged off.
Source
Sources: Papa Murphy's Franchise Disclosure Document (2026, Minnesota CARDS file 35626-202603-09); U.S. Small Business Administration, 7(a) loan program charge-off data, FY2010–FY2019. Franchise data is matched on the SBA's franchise code / brand name. "Failure rate" here means the share of approved loans (resolved: paid in full or charged off) that were charged off; it is not a measure of unit closures. Last updated September 30, 2026.
Cite this page
Franchise Failure Rates (2026). Papa Murphy's franchise cost, Items 5–7, and SBA 7(a) default rate. From the Papa Murphy's FDD and U.S. SBA FOIA data, loan statuses as of June 30, 2026.
https://franchisefailurerates.com/franchise/papa-murphys/cost/ · Data & methodology