Papa John’s International Inc.’s founder, blocked from the pizza chain’s headquarters amid a deepening dispute with the rest of the board, is betting that franchisees and workers will have his back.
John Schnatter, who resigned as chairman last month, took out a full-page ad in the company’s hometown paper, the Courier Journal, to direct employees of the Louisville, Kentucky-based firm to a website he’s launched, called SavePapaJohns.com. Papa John’s has about 120,000 workers worldwide, including those at its franchises.
“The Board wants to silence me,” Schnatter wrote on the website, which includes copies of legal documents in his fight with the pizza company. “So this is my website, and my way to talk to you.”
The website is part of Schnatter’s bid for new leadership at the chain, which is struggling with declining sales and controversies related to his comments. The 56-year-old came under pressure after a July media report that he used a racial slur and descriptions of violence against minorities on a call with a media agency. He admitted to using the slur but said he was taken out of context.
Months earlier, he had exited the chief executive officer job over critical comments about the National Football League’s national-anthem controversy. He’s since said he regrets resigning.
“Papa John’s is our life’s work and we will all get through this together somehow, some way,” Schnatter says on the website. “I can only imagine how difficult this entire situation is on you, and I’m very sorry you all have to go through this.”
After the pizza chain reported weaker-than-expected earnings last quarter, Schnatter published a blistering critique of the company’s leadership, including CEO Steve Ritchie.
The chain punched back, noting that Schnatter’s controversy is weighing down performance, with North American same-store sales falling 10.5 percent in July. The chain has had to give financial assistance to franchisees who’ve been hurt by Schnatter’s statements “to mitigate closings,” it said.
On July 22, the company’s board adopted a poison pill designed to prevent Schnatter from adding to his roughly 30 percent stake in a bid to gain majority control.
Seeking Distance
While Schnatter is appealing to the company’s workers and franchisees, some restaurant owners have taken action to distance themselves from the founder. Franchisee groups across Florida issued statements last month stating they “do not share the same sentiments as the founder of Papa John’s.” Others have reported declines in sales.