“Papa Priority” by Papa John’s (PZZA Quick QuotePZZA - Free Report) is a new express service being tested in select locations. With an additional charge of $2.99, customers can have their pizza order jump the line and be prioritized ahead of all other orders. Per location, this option is currently available to only five orders per night; “Papa Priority” is hoping to expand beyond their test stores.  

Papa John’s is not ensuring orders to be delivered faster than normal. Their website states that the fee ensures the customer’s name is bumped ahead, “so that it is made faster and therefore, ready for delivery sooner.” AP News dubbed the move as “taking a page from the airline industry”; however, unlike airlines, there is no guarantee of faster movement with “Papa Priority”.

At the face of it, there seems to be a handful of speed bumps. With the fee being $2.99 and up to five priority orders per location, is it really worth Papa John’s time and effort for an additional $15 of sales per store? And will customers be open to paying almost 30% more, considering $10, for faster service? One of two things will need to happen for the service to expand: the available priority order count will need to increase or the cost of the priority will need to be hiked. Both moves look to have gloomy results.

Let’s say Papa John’s opens “Papa Priority” to all pizza orders. I mean, why wouldn’t they? Any logical business will take an extra $2.99 from customers for a service they do not have to guarantee; and that’s exactly the problem with it. An extra $2.99, relatively, is not a hefty a fee. If I was hungry after a long and tiring day of work, you better bet that I’ll pay a small fee to have my pizza hit the taste buds sooner. But if everyone else has the same mindset, and they are all ordering via “Papa Priority” during peak meal times, won’t the delivery time end up being the same?

On the other hand, people may fear their delivery order being pushed back and order “Papa Priority” to ensure others don’t delay their meal. In the end, those scenarios look to even everything out to zero. Especially for the people who choose not to utilize “Papa Priority”, will they really have the patience of their order being held back and delivered later than normal?

Now, let’s imagine Papa John’s chooses to hike the price of “Papa Priority” instead of offering the service to all orders. How much are customers willing to pay to have their pizzas delivered ahead of schedule? Unless it was a night of drinking, I doubt it will be as much as the price of the pizza itself.

The heart of the issue is this: if Papa John’s would like “Papa Priority” to be available to a mass audience, can they find the ideal price point and quantity level that clears their market and is still profitable enough to be worth each stores’ time and effort?

Papa John’s should focus efforts on bettering their pizzas, rather than allowing customers to cut lines, to solve their woes. Product focus has done well for competitor Domino’s (DPZ Quick QuoteDPZ - Free Report) , with new offerings such as their garlic seanoned-crust.

Customers have given positive ratings thus far, but we will have to keep our eyes open to see how Papa John’s chooses to expand the new service.

Everything You Need to Know About Snapchat BEFORE It Goes Public

You may be curious about the buzz surrounding Snap Inc.'s IPO on March 2. With the company expected to be valued around $22 billion, it is expected to be the largest IPO since 2014. But should you snap up this tech stock on Day 1?

In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges. You'll also learn about 4 other exciting tech companies with jaw-dropping growth. Each could go public in the coming months.

Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop. Download this IPO Watch List today for free >>