Papa John’s has over 5500 locations globally, revenues reported at over
$2 billion dollars , and is one of the most successful pizza fast food chains in the world.
And so it may be hard to believe that Papa John’s started out of a bar’s broom closet,
that its founder resorted to dumpster diving in hopes of finding more customers,
or that the fate of the company was decided over a speedboat.
This is the untold truth of Papa John’s Pizza, and the Papa who made it all happen.
It was the autumn of 1977 in Jeffersonville Indiana, when a young 15-year-old kid by the name
of John H. Schnatter got his first job washing dishes at a small Italian pizzeria known as
Rocky’s Sub Pub. But John wasn’t content with just dish washing and set his sights on making pizzas
from his first day. After months of hard work, the Fondrisi family who owned the restaurant allowed
John to start occasionally preparing the pizza dough and tomato sauce, but they adamantly kept
the honor of baking pizzas within the family. Still, John refused to give up and persevered.
And his determination paid off a couple of months later when Rocky’s was given
a glowing review by Kentucky’s largest newspaper. As a result,
the restaurant became so busy that same night that the Frondrisis were forced to ask John
to help bake pizzas to keep up with the demand. Despite only ever watching the family make pizzas,
he took to it like a fish to water and never went back to dishwashing again.
Later after graduating high school, John attended Ball State University,
pursuing a degree in business administration. While attending college he needed a job to cover
his tuition and living expenses, but a brief, yet miserable stint working at a Wendy’s scared
John away from ever flipping burgers again. Instead, he decided to return to pizza making
at the college town’s local pizzeria named Greek’s. The owner took John under his wing,
and showed him how to efficiently handle high volume orders and maximize productivity. In fact,
John loved working at Greek’s so much that he was tempted to drop out of school and
start a Greek’s franchise, but his mother and grandfather convinced him to finish his degree.
Still, the idea of running a pizza chain stuck with him and as he completed his university
classes, he began dreaming up his own pizzeria. However, by now it was 1982 and chains like Pizza
Hut, Domino’s, and Little Caesars were well on their way to taking over America. If John wanted
to stand a chance against these growing giants, he needed to come up with a way to stand out from the
competition. Ultimately, John figured that if Pizza Hut owned variety, Domino’s owned speed,
and Little Caesars owned price, the only other place to compete was in taste and quality.
Looking towards his experiences at Greek’s, he decided that his pizzeria chain needed to look,
feel, and taste like a mom-‘n’-pop pizza shop no matter how big it got.
Afterwards, John toiled away in his free time designing menus, sketching out floorplans,
writing up recipes, figuring out what equipment he would need, and so on. But he was stumped
on what to call his dream pizzeria though. John turned to one of his college dormmates
majoring in marketing if he could come up with a name and logo for him. Just a few days later,
he was handed a logo that read “Papa John’s.” It was exactly what he wanted.
Unfortunately, he didn’t have enough funding yet, so his dreams and plans
would be packaged away in a cardboard box in his closet for a few more years.
After graduating John moved back home to Jeffersonville, but he had difficulties
finding work. After unsuccessfully applying for dozens of jobs, John’s father, Robert,
approached him with an offer to manage a tavern he owned named Mick’s Lounge. The
catch was that the bar was falling apart, the quality of the drink and food were rock bottom,
employee morale was awful, and, worst of all, the business was $64,000 in debt!
Robert believed the place was doomed and hoped his son John could minimize the damage so that
he wouldn’t be left completely bankrupt. Despite the grim outlook, John was ecstatic to take on
the challenge and worked tirelessly over the next seven months to save the bar. Given free reign,
John’s entrepreneurial spirit went wild as he came up with cost cutting measures,
creative sales techniques, and events to drive up profits. He even sold off
his beloved 1971 Chevrolet Camaro to pay off the business’ debts in time.
By the end of February 1984, John achieved the seemingly impossible:
he’d transformed Mick’s into a successful bar. As amazing and gratifying as this achievement was,
John soon realized he wasn’t truly happy. While he loved running his own business, he had no love for
running a bar in particular. The constant stench of alcohol and smoke alongside the nightly bar
brawls took its toll. John swore, “I didn’t want that life – and I didn’t want to be complicit in
helping others live it, either. I had to find something else, something actually fulfilling.”
One fateful night in March 1984, John’s gaze fell upon a broom closet while he
was closing up Mick’s. It suddenly came to him in a flash. His dreams of running
his own pizzeria could start right here. After all, he made a fine profit serving
up bar food to customers at Mick’s already, why not start serving up pizzas instead?
He went home, immediately dug the cardboard box filled with his Papa John’s plans out
of his closet, and began plotting away. The next morning John gathered Robert
and the team at Mick’s to excitedly pitch them his idea of working their
way out of the bar business and running a pizza company instead.
After seeing what his son had achieved with Mick’s, Robert signed on at once and the
others quickly followed suit. They wasted no time getting started and began tearing down
the broom closet’s outer walls to make room for a pizza oven that very same night. Within a couple
of weeks split between renovating the broom closet while still running Mick’s as usual,
John and his team had everything ready to get their humble, very cramped pizzeria underway.
With Mick’s profits covering John’s overhead and expenses, he spent the next few months
baking away in the tavern’s broom closet turned pizzeria, improving his skills, since he’d become
a little rusty after not making pizza in years. He shared his early creations with his employees
and the bar’s customers, using them as a focus group to figure out what worked and what didn’t.
After finding his pizza-making groove, John ran into another snag. It turned
out it wasn’t easy to gain customers when your pizzeria is based out the back of a
bar. He tried passing out menus to the bar’s customers, placing door hangers around town,
sending out coupons, running newspaper ads, and more, but nothing really worked.
That’s when John came up with a devious scheme. Late at night John snuck over to
the pizza delivery king of the town, Domino’s. His target? Their dumpster,
which contained hundreds of receipt slips with customers’ names, addresses,
and orders. John happily dived in the dumpster and stole as many receipts as
he could. After collecting enough from his dumpster database, John wrote each potential
customer a personally signed letter which read, “To the pizza lover who this concerns.
Papa Johns makes better pizzas. We’ll give you half off on your first order. Give us a try.”
It was dirty business, literally, but it worked extremely well.
Sales massively increased. Eventually the Domino’s caught on and soaked their
receipts in water before tossing them out to stop him, but by then it was too late.
Papa John’s had a loyal and growing customer base and was finally on the road to success.
Word was spreading throughout the town about John’s new up-and-coming pizza joint, but
there was yet another problem. Nearly all of their business was made via delivery as
whenever new customers came to Mick’s in person for a Papa John’s pizza they rarely, if ever,
came back. While John did his best to spruce up Mick’s, there was no changing the fact that it
was a bar – far from the mom-‘n’-pop family restaurant he always wanted Papa John’s to be.
So in February 1985, John took out a $40,000 loan to erect the first proper Papa John’s
pizzeria. Luckily, he didn’t have to look hard for a location as right next to their bar was
a boarded-up KFC that had since moved away years ago which had all the space they needed.
After cleaning out the space, John and his crew created handmade miniature paper scale models of
their future restaurant to be. They settled on a design, but came to the realization that they
wouldn’t be able to afford hiring construction workers, forcing John and his team to do all
the work themselves. All the while they still ran Mick’s bar and the pizzeria in its broom closet,
as they needed every cent they earned to fund the construction. It was grueling work. Mick’s
often became John’s home as he sweated it out till the early hours of the morning and passed
out in a corner of the tavern before waking up and starting all over again. After six weeks
of nonstop labor they were almost done, but tragedy was right around the corner.
In mid-March 1985, John’s father checked into the hospital. At first his illness didn’t seem
too serious, but his health rapidly deteriorated. Five days later, Robert Schnatter passed away,
leaving John devastated. Nevertheless, the morning following his father’s funeral,
John was determined to still make his father proud. He hurried over to Mick’s, entered,
and paused. On his right stood the bar and, on his left, remained the incomplete Papa John’s.
He looked back and forth between the two. He could’ve easily taken a seat at the bar and
drowned his sorrows away. No one would’ve blamed him for it – the man’s father he
was so close with had suddenly died! But he refused. He knew his father would’ve wanted
him to finish building his pizzeria and see his dream come true. He turned to the left,
picked up a hammer and some nails, and went back to work.
Guys, I have some extremely good news for you. This is one of those very rare
times in life where you can literally get free money…which I know sounds too good to be true,
but here’s the thing: occasionally when a company is growing and looking to gain more market share,
they offer free deals that are so ridiculously good in order to introduce new people to their
service. Like back in the day PayPal offered free cash for signing up, or Uber gave away free rides.
Well, right now the stock trading platform moomoo is giving away 15 free stocks to
MagnatesMedia viewers who join using my link in the description below for a limited time.
Now, all the free stocks you get will be worth between $3 - $2000 EACH! Of course most of the
free stocks will probably be closer to the lower end, but you have 15 chances! And even
if you’re super unlucky and all your free stocks end up being only around $5, that’s still $75 in
free stocks! And some of you are gonna get stocks with much higher values than that.
So here’s how it works:
Firstly, click the link in the description below,
and you’ll get 1 free stock just for opening an account - which is free, quick and easy to do.
Then, if you deposit $100, you’ll get 5 free stocks.
Or if you deposit $2k, you’ll get 15 free stocks!
And just to be clear, to get the free stocks you only have to DEPOSIT the money and keep it
in your account for the promotion period. And if you don’t like some of the stocks you’re given,
you can just sell them for cash and withdraw the money.
And by the way, this isn’t just some random unproven business,
their parent company is a billion dollar Nasdaq traded company - that’s why they
can offer this amazing deal. But it’s only for a limited time.
So if you’re a US citizen, I honestly don’t see why you wouldn’t do this. I
mean if it were me I’d probably be getting my family and friends signed up as well,
but that’s just because I love a free deal. But, I hope you take advantage of this as I want you to
get your free stocks, so just click the top link in the description below to get started right now.
On April 11th, 1985, just 19 days after his father’s passing, and around a year
after John first began making pizzas out of Mick’s broom closet, the first proper Papa
John’s restaurant opened its doors for business. Although they were located right next to Mick’s,
their business improved exponentially. Both due to the more family friendly atmosphere
as well as the simple fact of having the Papa John logo proudly displayed on a sign above
the door rather than hidden away in the back of a bar. At the end of their first month,
they’d tripled their previous sales record inside Mick’s and their growth only continued from there.
By the next month they eclipsed the sales of their toughest competitor,
the Domino’s John had dumpster dived at before. That got John thinking, if he
could beat the competition in Jeffersonville, then what was stopping him from taking on the
rest of the world? As the revenues of their first location grew each week, John turned to the task
of figuring out where to open his second location. Not wanting to stretch himself too far, especially
given the shockingly fast pace his business was growing, he chose the nearby town of Clarksville,
Indiana. It was just around five miles away and right outside of their current delivery range.
This idea of building new locations just a little further away from their previous locations, became
a key tactic of the business’ future. John figured that building locations outwards from another
breeds a stronger community compared to randomly opening locations far and wide from one another.
John was also careful to learn from his first restaurant before blindly building another. The
original Papa John’s next to Mick’s included a full dining room, complete with fine tableware
and an expanded menu. It fitted John’s dream of a mom-‘n’-pop style restaurant,
but the numbers showed that most of his customers preferred carryout or delivery rather than dining
in. Unafraid of admitting that times were changing and ever quick to adapt, John cut
the fat when designing his second location. The interior and menu were simplified and it was built
off of a local highway to better facilitate the pick up and go nature of the business.
Leading up to the second location’s grand opening, John returned to his old tricks
and raided the dumpster of Clarksville’s Domino’s for customer addresses to send
handwritten letters to. It worked just like before and the Clarksville Papa
John’s sales grew every week that went by. Unwilling to let the momentum go to waste,
John quickly set off on building a third location in the next town over less than a month later,
which proved to be yet another success. John’s aggressive tactics were evidently working, so on
December 1st, 1986 he decided to open a location in the nearby city of Louisville, Kentucky.
Unfortunately, their beginner’s luck in the relatively sleepy burgs of Southern Indiana hit a
brick wall when entering Kentucky’s biggest city. The Domino’s here was well entrenched thanks to
their strong mutual relationship with Louisville’s downtown hotel industry. It was disappointing
seeing his winning streak come to an end, but John refused to close their struggling Louisville
location. Instead, John turned his attention toward upgrading the infrastructure of his pizza
chain to better serve his budding company. Additionally, John also took care to put
people who shared his vision of Papa John’s future in charge of
each of his locations and stepped aside as they went to work. This
hands-off approach left him free to focus on the long-term success of the company.
Then in early 1987, the Papa John’s location in Louisville finally broke through,
earning a profit and a dedicated following. Thanks to the time John spent improving the
company’s foundation, he was able to capitalize on this success with vengeance and bought out
three locations of a failed pizza chain in the city to be converted into Papa John’s as well.
Meanwhile, John also saw his dreams of turning Papa John’s into a franchise
finally come true too. Their first franchisees were prior Domino’s owners who were convinced
to defect to Papa John’s side after seeing the young chain’s success. And before long,
more and more people flocked to open their own Papa John’s franchise.
Not everyone agreed with John’s vision. After Robert’s passing Papa John’s ownership was split
between three people. John personally owned 49 percent, one of his earliest team members,
Bob Ehringer, owned 36 percent, and John’s uncle Bill owned 15 percent. The trio had an
excellent relationship during the company’s early years, each contributing as much as they could,
but things began to sour by 1987. The key issue became that despite all of Papa John’s successes,
none of them were receiving much in the way of profits. John was adamant about
reinvesting every single cent they earned back into the company to further fuel its growth,
which was clearly paying off, but Bill didn’t see things that way.
Bill was in his 60s by now and didn’t understand why they needed to work so hard,
especially when he wasn’t seeing a dime of it. He wanted to stop spending so much money,
time, and effort on expanding. As he saw it, Papa John’s was big enough already
so why not just kick back and cash in the checks for a change? To make matters worse,
Bill spent a great deal of time driving around with Bob maintaining the stores and
used that time to slowly, but surely bring him over to his side rather than John’s.
Things finally came to head when one of the trio’s weekly meetings devolved
into a vicious argument. Neither John nor Bill were willing to back down. And Bob,
tired of working day in and out for years, took Bill’s side. Together the pair represented
51 percent of the company which was all that was needed to throw the fate of Papa John’s
into question. John recognized that he needed to regain control of the company and fast. Otherwise,
his life’s work could’ve come crashing down, especially as the infighting was already
causing the chain’s quality control to slip. But the question was how?
Then in early 1988, Bob called up John asking for $20,000. Bob had
become obsessed with a speedboat he purchased and wanted to increase its power with a new
muffler. John saw his chance and offered to hand over the cash in exchange for 2
percent of Bob’s shares in Papa John’s. Bob agreed and with that, John owned a majority
in the company and Papa John’s future was saved…all thanks to a speedboat muffler.
Later that year, John decided to buy out their shares completely for over
$300,000. That probably seemed like a fine prize to Bob and Bill at the time;
although they would soon look back and think they’d got ripped off.
Now that John had full control of the business, he was free to take his company to a whole new
level. By the end of the 1980s there were nearly 40 Papa John’s restaurants - yet by by June 10th,
1991, Papa John’s celebrated the opening of its 100th location. That number doubled the
very next year as Papa John’s spread further out towards lucrative metropolitan markets
such as Indianapolis, Cincinnati, Nashville, Cleveland, Memphis, St. Louis, Atlanta, and more.
Still, despite their victories John’s ambitions were running faster than
his profits. That’s when Rick Sherman, then CEO of the Rally’s hamburger chain,
suggested that John use Wall Street’s money to further fund Papa John’s growth. After
months of seemingly endless paperwork, Papa John’s hit Wall Street on June 8th,
1993. Wall Street’s brokers instantly fell in love with the chain and snatched up its stocks
like crazy. In a single day Papa John’s became worth $344 million. Less than ten years since it
started, Papa John’s had finally entered the big leagues and its ascent only continued from there.
In 1998, Papa John’s first international location opened in Mexico City and the chain reported $1
billion in system-wide restaurant sales. In 1999, Papa Johns had 2,000 restaurants to its name. In
2002, Papa John’s broke ground by becoming the first pizza chain to allow online ordering across
all of its domestic locations. This paid off in dividends as the company’s online sales topped $1
billion alone in 2008. Finally, in 2016, John saw his pizza chain surpass 5,000 locations worldwide.
But let’s pause. If you are someone who loves a Disney-style fairytale ending,
this is the point to click off the video. Because unfortunately, this incredible rags to riches
story from broom cupboard to one of the world’s largest pizza chains, would end in controversy.
In 2017, pizza sales were down and so was their stock price, but John came out and
blamed the NFL for this, which Papa John’s was the sponsor of. John publicly criticized the NFL
for its handling of the national anthem protests started by Colin Kaepernick to draw attention to
police brutality and racial inequality. His comments were very poorly received,
as they not only seemed to be passing the blame, but also insensitive to the issues involved.
So, executives at the company hired a firm to help train John to handle the media better in future,
and avoid any more public backlash. However, in an extremely ironic turn of events,
during a call with the PR firm, John used the N word whilst trying to explain why he didn’t
think his comments were that bad compared to what other people had said. After this,
the PR company immediately stopped working with him - and when the media found out why,
and John’s comments got leaked, it created lots more headlines of controversy for Papa John’s.
All the backlash from this meant John stepped down as CEO and chairman of the company.
To distance themselves further from John, Papa John’s began removing his face from
ads and packaging. Papa John's headquarters then canceled the sublease agreement on John’s office,
effectively evicting the founder of the company from his own office. Papa John's
also created a new policy, which was dubbed a 'poison pill', that ensures John can never
acquire a controlling stake in his own company again, since he was considered too toxic to
the brand. Of course, that’s not ideal when the company is literally named after him.
For John, he felt like he’d been betrayed by his own company. In November 2019, John finally did a
public interview to address everything, and went on to criticize Papa John’s, and the way it had
been run since his departure. He even criticized the company’s food saying: "I've had over 40
pizzas in the last 30 days, and it's not the same pizza. It's not the same product anymore. It
just doesn't taste as good." He ended by warning that the company’s “day of reckoning will come.”
Of course, John is certainly not the only founder to turn against his own company. If
you wanna know why Colonel Sanders hated KFC and decided to sue them,
just click this video right here. I’ll see you there. Cheers!