You've seen Papa John's face in countless commercials,
but what do you really know about the man behind the pizza?
In 2017, Papa John's started down a very rocky road. After record profits in 2016, they released
less-than-stellar financial reports for the third quarter of 2017. Shares dropped 11 percent after
the numbers went public, and the net worth of Papa John himself dropped $70 million.
Forbes said he was still worth around $801 million,
but he took the loss personally. According to Schnatter, the losses were the fault of
the NFL and their inability to resolve the controversy around players kneeling during
the national anthem. Papa John's was the official pizza sponsor of the NFL,
after all, and more in-depth reports on ESPN showed just how much Schnatter blamed
the NFL for his company's failings. He didn't pull any punches, going on record as saying:
"Leadership starts at the top, and this is an example of [the NFL's] poor leadership."
Not long after, the long-standing relationship
between Papa John's and the NFL came to an abrupt end.
"Brutal, actually. Stick with pizza."
Schnatter's spat with the NFL opened a whole can of ugly worms. It was only days later
that neo-Nazi site The Daily Stormer published a piece on how Schnatter's accusations and opinions
would make Papa John's a perfect candidate for becoming the official pizza of the alt-right.
According to Business Insider, Schnatter's comments on the NFL protests aren't the only
thing that endeared him to the alt-right, citing his donations to Donald Trump's
presidential campaign and his condemnation of Obamacare as other contributing factors.
Not surprisingly, Papa John's went into damage control mode, with an official statement to
The Huffington Post from Peter Collins, senior director of public relations. It read, in part,
"We condemn racism in all forms and any and all hate groups that support it. We
do not want these individuals or groups to buy our pizza."
After 2017 proved to be a rough year for Schnatter, he announced he would
be stepping down from his position as CEO in 2018. The move came on the heels of controversy,
but according to the Chicago Sun-Times, the Papa John's camp is keeping mum on whether or not the
controversy is the reason he decided to step down in favor of longtime COO Steve Ritchie,
or if there are other things going on behind the scenes.
Schnatter would still be the face of the company
and chairman of the board... but that didn't last long.
On July 10th, 2018, John Schnatter admitted to using some toxic language
during a conference call with a marketing company just a few months prior. Ironically,
the call was to address the backlash Papa John's was still facing, and Schnatter
shocked listeners when he was asked how he would distance himself from racist groups.
A source told Forbes he responded by using racial slurs, which he claimed were intended
to prove his stance against racism. They had the opposite effect. The marketing company soon
ended their relationship with Papa John's, who themselves scrambled to end their relationship
with Schnatter, and Schnatter admitted it was all true in a statement to Business Insider, saying,
"News reports attributing the use of inappropriate and hurtful language to me
during a media training session regarding race are true. Regardless of the context,
I apologize. Simply stated, racism has no place in our society."
The ill-fated conference call still marked the end of his
role as chairman of the board, and he stepped down soon after.
In July 2018, the company was sued by its founder and namesake. Schnatter filed a
lawsuit that claimed many things, including that the company denied him access to records
and treated him unfairly. Forbes was also also mentioned in the lawsuit,
with Schnatter claiming the news outlet had "falsely accused him of using a racial slur."
Schnatter admitted that the slur had come from his mouth, but his attorney stressed there was
a difference between using it and quoting someone else who had used it… which is what he claimed to
have been doing. The lawsuit also claimed there was some shady business going on behind the
closed doors of the boardroom, and that the company had "planned this coup in advance."
Those are some serious accusations, and when Forbes reached out to the company, they responded:
"We are saddened and disappointed that John Schnatter has filed a needless and wasteful
lawsuit in an attempt to distract from his own words and actions."
Schnatter's remarks have had some far-reaching consequences,
and those consequences are perhaps best seen in the damaged relationship between
the pizza giant and one-time associate college the University of Louisville.
U of L announced in July 2018 that they would be renaming their Papa
John's Cardinal Stadium to simply Cardinal Stadium, and they weren't the only ones
to sever ties with the pizza-maker. The University of Kentucky, Morehouse College,
and Oregon State all ended their associations with Papa John's. Schnatter's own college,
Ball State, has also seen some major controversy over whether or not his name
should stay, proving once and for all that sometimes, an apology just doesn't cut it.
Papa John's has had more than its fair share of legal problems over the years.
In 2017, for instance, undercover cops in Washington State busted a local franchise
for selling drugs out of the store, conveniently
delivered inside a pizza box. And that wasn't the first time.
In 2013, a Brooklyn delivery man was busted for selling more than $40,000 worth of cocaine
out of a Papa John's.
"A couple of slices and a coke took on a whole new meaning at this Papa John's in
Sunset Park."
Those incidents could be chalked up to rogue franchisees, but the parent company has gotten
in its own kind of trouble thanks to a series of lawsuits.
In 2016, Papa John's settled a class action lawsuit alleging they had illegally collected
taxes on delivery fees, while in 2015, more than 19,000 delivery drivers across six states
were awarded a settlement totaling $12.5 million for being underpaid.
And then there's the weird text message spam lawsuit from 2013, which Papa John's settled
for a cool $16.5 million after causing customers mental anguish by bombarding them with over
a half a million texts alerting them to pizza deals in the middle of the night.
Papa John's apparently hasn't learned its lesson, though, because a similar lawsuit
was brought against the company again in 2017 for excessive text spam.
Just keep that spam on a pizza, Papa John.
You're probably familiar with Papa John's slogan:
"Better ingredients, better pizza… Papa John's."
It's straightforward enough, but in 1998, Pizza Hut sued them for false advertising,
claiming there was no actual evidence that they used better ingredients, or that their
ingredients led to better pizza.
Papa John's was briefly forced to pull their advertising, but the ruling was overturned
on appeal after Papa John's pointed out that there was no scientific proof that Pizza Hut
had the "best pizzas under one roof" as their ads claimed.
Touche.
The slogan caused more trouble for Papa John' s in 2013, when food journalist Melanie Warner
tried to find out exactly what these so-called better ingredients were and was denied access
to the recipe. Phone calls and requests for allergen in-formation
went unanswered, and when she went to her local Papa John's locations, it turned out
that the employees didn't really know what was in the food, because they were sent
pre-prepared, frozen crusts.
No doubt made by Schnatter himself.
"I had a vision that still holds true today. To make a better pizza, you have to use better
ingredients. And that's what
we do everyday at Papa John's and our customers love it!"
After Warner's expose ran, Papa John's bowed to media pressure and finally posted a list
of ingredients on their website, but that just started a whole new round of problems,
as food bloggers pounced on questionable ingredients
containing preservatives, artificial coloring,
MSG, and high levels of trans fats.
Papa John's responded by announcing they were going to spend over $100 million to find healthier
alternatives to 14 ingredients they had determined weren't up to snuff.
As part of that initiative, in 2016 Papa John's became the first nationwide pizza chain to
eliminate high-fructose corn syrup from their pies.
Companies only have so much control over what their employees say or do, something Papa
John's has found out the hard way. Beyond that thing where people were selling
drugs out of their stores, Papa John's has also had to deal with multiple high profile
accusations of racism against their employees. In 2013, for instance, Schattner himself issued
a public apology after a Papa John's employee called a customer back and left a racist rant
on their voicemail.
And the company has had to apologize numerous times for racist messages written on receipts
and pizza boxes.
The Twitterverse exploded in 2015 after Iggy Azalea took aim at Papa John's in general
and one of its drivers in particular after she found out he'd shared her phone number
with his family, who then started calling her.
She later told Ryan Seacrest that she had received a formal apology from Papa John's.
But the incident exposed a broader privacy issue with the company, with Vice reporting
that the fine print on the Papa John's website gives them the right to collect your information
when you place an order and then sell that
information to other merchants unless you specifically opt out of the program.
Maybe DiGiorno's response to Iggy's privacy plight was the most astute of all.
"Delivery? SMH."
Schnatter is a dedicated political conservative, personally donating $20,000 to the Republican
party in July of 2016 alone. And his private politics have also filtered
down into his corporate agenda. For instance, Papa John's has teamed up with
the right wing Koch Foundation to fund research centers at several universities to study what
they call "the role of free enterprise and entrepreneurship in advancing society."
This created a political firestorm when it was revealed their deal with Florida State
University gave the Koch Foundation the right to influence not only who was hired, but what
was taught at the school, something particularly
troubling given similar deals with the Universities
of Louisville and Kentucky stipulated all details would remain strictly secret.
And in 2012, Schnatter prompted outrage when he publicly spoke against the Affordable Care
Act because it would require him to provide health care for his employees, which could
raise the price of pizzas by a whopping 14 cents.
Schnatter was ripped by customers and the media alike for what was viewed by many as
a cynical and heartless stance.
"I gotta to pay an extra 11 to 14 cents so the guy making my pizza can get antibiotics
to keep him from hacking up lung tissue onto my pizza, Outrageous!"
Schnatter has a reputation as a perfectionist, to the point where he personally makes surprise
inspections of individual pizza shops to make sure they are up to his standards, tossing
pizzas in the garbage if they don't meet his expectations.
Chris Sternberg, a vice president at Papa John's, told People
"John's standards are so high.
When you meet them you've really done something."
Some felt his standards were actually too high, as the company was once known for having
a high turnover rate at the executive level. A report by the New York Times revealed that
in 1994 and 1995, five high level executives had quit Papa John's, including the company's
president, in protest of Schnatter's managerial style,.
Marketing expert Jack Trout told USA Today that Schnatter
"...walked up and down the halls like a big cat, stalking.
I said, 'John, you make people nervous.'
For what it's worth, Schnatter says his methods are less harsh these days, with current executives
averaging 12 years with the company.
And it's not just his employees that have problems with Schnatter.
His neighbors in Anchorage, Kentucky aren't
all huge fans either. Though Schnatter has gone out of his way to
ingratiate himself by sponsoring town beautification
projects, residents weren't particularly pleased when he decided to add a helicopter pad to
the estate outside his 40,000 square foot mansion.
Over a dozen neighbors complained to town officials just in the first few months of
2016 about Schnatter's personal airport disturbing the peace.
Schnatter later met with the town to make his case, which included the assertion that
he needed the helicopter in order to cut his fifteen minute work commute down to five minutes.
Needless to say, residents just laughed at that one.
Now, if he was using the helicopter to deliver pizzas...