Papa John's is one of the largest pizza chains in the world, with thousands of franchises
in more than 35 countries but the future of the chain is uncertain.
In 2018, the company started relaying their plans for the future, detailing how they were
going to remedy their plummeting stock prices, stagnant sales, and string of closures.
So what happened?
Here are a few reasons why Papa John's is struggling to stay open.
The price of a slice
In early 2018, stock analysts went straight to the source to find out just what was going
on with Papa John's.
CEO Steve Ritchie explained one of the company's biggest problems was a pretty simple one people
didn't wanna pay what it was charging for pizza.
Ritchie claimed,
"Even the people who prefer our brand our loyalists use our competitors when times are
tight.
So, we need to fix that."
Ritchie said public perception is that Papa John's is overpriced.
It's hard to argue with that assessment, especially considering some of the far cheaper deals
offered up by its competitors.
"Get a large hot and ready classic for just 5 bucks, every single day.
Little Caesars ... Pizza Pizza"
Schnatter's heated statements
According to Brand Index, Papa John's took a major hit in 2012 when founder, John Schnatter,
said his business would suffer immeasurably if Obamacare became law, telling Politico,
"We're not supportive of Obamacare, like most businesses in our industry."
Schnatter said he would be forced to provide his employees with healthcare and according
to the The Huffington Post claimed the company would have no choice but to raise prices,
possibly cut jobs, and hold off on hiring.
According to USA Today, he was vilified for preaching from his $7 million mansion about
a few extra pennies per person.
But his finger pointing later reached beyond the White House.
In November 2016, Schnatter blamed NFL players' protesting police brutality during the national
anthem and falling game day ratings for his own slipping business.
According to The Washington Post, Schnatter said,
"This year the ratings are going backwards because of this controversy.
And so the controversy is polarizing the customer, polarizing the country."
The controversy had Schnatter stepping down as CEO not too long after, and Papa John's
losing a lot of customers as well as its partnership with the NFL, by 2018.
CNBC reported company stock dropped 13 percent in the wake of his comments.
Slow to react
It didn't help matters when Papa John's was declared the "official pizza of the alt-right"
by white supremacist website The Daily Stormer one day after Schnatter's comments went public.
Papa John's condemned, quote, "racism in all forms" in an effort to do some damage control,
but it was too little, too late.
Chief Marketing Officer Brandon Rhoten said,
"I would argue our biggest Achilles' heel as a brand is our inability to react quickly
to real-time happenings in the world."
Kinda gluten-free
When Papa John's announced they were introducing a gluten-free pizza in 2017, fans got pretty
excited.
But there was a catch: it wasn't safe for customers with celiac disease or severe gluten
intolerance which defeated the entire point.
According to CNBC, Papa John's announced that their new quinoa-based pizza crust was indeed
made in a separate facility from their regular products.
But with no precautions in place in their stores, cross-contamination was inevitable.
One nutritional expert said:
"It sounds like Papa John's is trying to get in on the gluten-free craze in an inauthentic
way."
Customer relations
Papa John's was built on "Better Ingredients" for "Better Pizza."
But when people started asking what all those ingredients were, they ran into a suspicious
roadblock.
Restaurants aren't legally obligated to list ingredients, but you'd think Papa John's would
be proud of its goods, right?
In 2013, US News & World Report dug into what kind of ingredients Papa John's was talking
about but came up empty-handed, concluding,
"By not disclosing what's in its food, Papa John's is revealing that it doesn't think
too much of its customers."
"Part of living up to our gold standard, is ensuring that our ingredients go from the
farm, to the box, to deliver on our better ingredients, better pizza promise"
In 2018, the company finally released a video version of their ingredients list, but remained
pretty vague on their sourcing.
"Our pepperoni, sausage, italian sausage, and beef toppings are all made from real beef
and pork, and blended with spices"
CEO Steve Ritchie says Papa John's will be pouring more money into developing new technologies
to help streamline the customer experience and offer a better value in the future.
But will it be enough to save Papa John's?
Only time will tell.
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