Papa John's Pizza (PZZA)

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‘Papa’ John dishes on n-word ouster: Without me, the pizza ain’t as good

By John H. Schnatter

October 29, 2019

“Papa John” Schnatter founded his namesake company in 1984, and built it into the nation’s third-largest pizza chain. But after he criticized the NFL’s inability to resolve the anthem protests, he was pushed out as CEO on Jan. 1, 2018. In a column submission to The Post, Schnatter argues that in the time since, his business — of which he still owns 16.7% — has been poorly run, and that it was a mistake to let him go.

As the founder and single largest shareholder of Papa John’s Pizza, I know a thing or two about management accountability. It was two years ago that I led my last quarterly earnings call for Wall Street analysts as the chairman and CEO.

Our sales at the time were slowing considerably, largely owing to the NFL’s mishandling of the protest controversy. A quarter of our marketing budget was invested in the NFL each year; as NFL viewership declined, so did customers’ exposure to our marketing.

More controversy ensued months later, when an internal diversity-training meeting was secretly taped and leaked to Forbes with a false narrative about a comment I made. In the meeting, I expressed frustration over the NFL controversy and paraphrased someone who had purportedly used the n-word on a frequent basis.

In fact, I was expressing my disdain for racism throughout the meeting, which was quite productive and demonstrated Papa John’s commitment to a diverse, positive and enriching environment. For decades, we’ve brought people of all backgrounds together for their mutual benefit, spreading tremendous success to employees, franchisees, partners and shareholders alike.

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Gov. Cuomo drops n-word during live radio interview
Ironically, Gov. Andrew Cuomo used a racial comment during a live radio interview last week, and African American state leaders rushed to defend him, showing their understanding of the intent and context of his words while also considering his character.



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Cuomo’s situation is in stark contrast to the irrational overreaction and internal exploitation of my comments. The double standard is jarring. I would have hoped to have been given the benefit of the doubt, just as Cuomo was. Instead, unnamed sources reversed the meaning and intent of my words to damage me.

This has left the franchisees and the company to struggle without my leadership and brand expertise ever since.

I have a huge stake in Papa John’s, not just financially, but also with 35 years of my blood, sweat and tears. In August 2018, I tried warning my fellow directors and put out a news release that the performance of the company was bound to get worse. My prediction has been proved right for four quarters since then and still today.

This year, I opposed management’s budget proposal, because I recognized that, among other things, no one on the board and very few in executive leadership had any experience in the pizza industry. They couldn’t possibly understand the steps necessary to correct this very complicated, struggling business as I had on a number of occasions in the past. One such comeback led to the growth of our stock price from more than $87 per share in 2017, up from $6.50 per share in 2008.

More important, what I’ve observed in the months since then is that the Papa John’s management may be emphasizing cost-cutting over product quality. Even the pizzas don’t appear to be made the way that I made them just a few years ago.

“Better Ingredients. Better Pizza.” isn’t just a slogan — it represents our core belief about the quality of our products, starting with the signature ingredients in my original recipes, including fresh packed proprietary pizza sauce, original fresh dough and garlic butter.

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Papa John's founder to employees: 'I miss you'
I hear from store managers, franchisees and employees, and I believe that their morale is at an all-time low. Some are taking out additional loans and putting off future plans as they tighten their belts based on the current performance of the company. Franchisees tell me that banks are even hesitant to lend them money to buy and build more stores. This troubles me deeply.

Based on my experience, recent declines in store economics make it extremely difficult to increase earnings per share for shareholders, now or in the immediate future.

Leadership means taking responsibility for the command of your ship and not using scapegoats. This management team needs to step up and change course — immediately — to revive our iconic American brand. I should know, since my team and I built more than 5,000 stores from scratch and brought us through other down cycles.

I’m watching carefully and hoping for good news — but a lot rides on the upcoming report for this company Nov. 5. At stake are the interests of thousands of people I consider my family, whose livelihoods depend entirely on the success of the current team to return our company to greatness.