How does Papa John's make money when they're giving away free pizza all the time?
How high are their Profit Margins?
How high are their Profit Margins?
Anonymous
Favorite Answer
they figure that for every free pizza you get, you are buying 5 or 6 so believe me, they not only make up for the free pizza but still make a tasty profit to boot.
mccoyblues
Because you have to buy one at full price to get one free. So the free pizza really isn't free if you can't get a discount on the first pizza you buy. And they assume if you like the free one you'll come back and buy more. So the reality is for every free pizza they give away they are hoping to get two full priced pizza orders out of you.
Pizza shops survive on volume, not on price.
Chad
They can afford to because of all of the other paying customers they get.
ABBI
Volume. Their sales are so high that they can afford it.