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John Schnatter doesn’t think much of Papa John’s management

In his latest interview, the company’s founder continued his criticism of the chain and its quality, says RB’s The Bottom Line.
Photograph by Scott Mitchell

The Bottom Line

John Schnatter hasn’t had a formal role with Papa John’s in months and has been unloading hundreds of millions of dollars’ worth of the company’s stock this year.

But that doesn’t mean he’s letting go. The pizza chain’s founder has been on something of a public relations tour for the past several weeks, working to improve an image that took a hit when he admitted using a racial slur during a conference call last year.

His latest interview was the strangest yet. Speaking to a local news station in Kentucky, WDRB, Schnatter took issue with new Papa John’s CEO Rob Lynch and former CEO Steve Ritchie, said a couple of board members should be in jail and said the pizza is just not as good now that he’s gone.

He promised more, too. Just not yet, apparently.

“Stay tuned,” he said. “The day of reckoning will come. The record will be straight.”

When pressed, Schnatter just laughed. “Stay tuned,” he said, smiling. When? “Sooner, rather than later.”

The former chairman, CEO and primary spokesman for Papa John’s has been increasingly critical of the company over the past year—even as the company moves on without him.

The Louisville, Ky.-based pizza chain has a new CEO in Lynch, a new chairman in Starboard Value CEO Jeff Smith, several new executives, a new spokesman and company director in Shaquille O’Neal, and new life on Wall Street.

The company has a new garlic-Parmesan crust, a new ad campaign and stronger sales. Papa John’s same-store sales turned positive for the first time since 2017, giving investors and management faith that the chain’s turnaround is in full force.

Its stock hit a new 52-week high earlier this month and is still trading higher than at any point since the first half of 2018, before news of Schnatter’s comments led to his resignation as chairman and ouster as its primary spokesman.

Schnatter himself remains defiant and unapologetic. He appears in public wearing his trademark red shirts, with his signature replacing the Papa John’s logo. He also insists that the company is crashing and that he did nothing wrong.

He insists that his use of the N-word during a conference call in May 2018 was used to highlight his hatred of racism.

Now he says that company directors used that incident to “steal the company.” He said that Ritchie and board member Olivia Kirtley “used the black community and race as a way to steal the company,” and said that Kirtley and her fellow director, Mark Shapiro, “should be in jail.”

“What they did was wrong,” Schnatter said. “They hurt a lot of people.”

Ritchie has since left his position as CEO, having been replaced by former Arby’s executive Lynch. Schnatter was critical of him, too.

“He has never been a CEO,” Schnatter said. “He has no pizza experience. He doesn’t really have a passion for quality. He doesn’t have a passion for people.”

Those comments were quite different from the comments he made the day Lynch was named CEO. At that time, Schnatter said that Lynch “has proven to be an effective marketing leader in previous roles.”

Despite his comments, Schnatter keeps on buying Papa John's pizzas. He said he’s had more than 40 pizzas over the past 30 days.

“It’s not the same pizza,” he said. “It’s not the same quality. The way they’re making the pizza is not fundamentally sound. It’s not Papa John’s pizza.”

That echoes a comment he made in a New York Post column last month, when he said that “without me, the pizza ain’t as good.”

Locally, Schnatter has been visible in other ways. His foundation recently donated $500,000 to renovate a baseball stadium at his high school alma mater in Jeffersonville, Ind., and he donated $1 million to Simmons College of Kentucky, a historically black college In Louisville.

And despite all of his public comments, he insists he doesn’t want to go back.

“There’s no reason to be in the car as the car crashes, even if you love the car,” he said.

But he says he’d be welcomed back as a hero by employees if he did return.

“If the management team was out and I went in, they’d be cheering, doing backflips, they’d be bouncing off the wall,” he said.

Stay tuned.

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