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Papa John's Pizza

Papa John's Pizza is an American restaurant franchise company. It runs the third largest take-out and pizza delivery[4] restaurant chain in the United States, with headquarters in Jeffersontown, Kentucky, a suburb of Louisville.

Papa John's International, Inc.
Papa John's International Inc.
Public
Traded as NASDAQPZZA
S&P 400 Component
Industry Pizza, Pizza Delivery
Founded October 2, 1984; 33 years ago (1984-10-02)
Founder John Schnatter
Headquarters Jeffersontown, Kentucky, U.S.
Number of locations
4700+ (January 2016)[1]
Key people
John Schnatter (President & CEO)
Steve Ritchie, COO (May 15, 2014)[2]
Revenue Increase US$ 1.439 billion (December 30, 2013)[3]
Increase US$ 106.5 million (December 30, 2013)[3]
Increase US$ 69.537 million (December 30, 2013)[3]
Total assets Increase US$ 464.291 million (December 30, 2013)[3]
Total equity Decrease US$ 138.184 million (December 30, 2013)[3]
Number of employees
20,700 (December 30, 2013)[3]
Website papajohns.com

Contents

HistoryEdit

The Papa John's restaurant was founded in 1984 when "Papa" John Schnatter knocked out a broom closet in the back of his father's tavern, Mick's Lounge, in Jeffersonville, Indiana.[5] He then sold his 1971 Camaro Z28 to purchase US$1,600 worth of used pizza equipment and began selling pizzas to the tavern's customers out of the converted closet.[6] His pizzas proved so popular that one year later he was able to move into an adjoining space. Dipping sauce specifically for pizza was invented by Papa John's Pizza that same year, so it is claimed although any number of other pizza places have historically provided pizza sauce for dipping when requested, and has since become popular when eating pizza, especially the crust.[7] In 2009, Schnatter got the Camaro back after offering a reward of $250,000 for the car.[8]

As of December 2016 PMQ Pizza Magazine said that the company was the third-largest take-out and pizza delivery restaurant chain in the United States.[9] (According to PMQ, Little Caesars is the third-largest pizza chain; however, it does not deliver.[10]) Company headquarters are in Jeffersontown, Kentucky, a community within the merged government of Louisville.[11][12][13] Its slogan is "Better Ingredients. Better Pizza. Papa John's."

Papa John's franchises over 4,700 establishments around the world, including around 3,500 in the U.S. and over 1,200 spread amongst 37 other countries and territories.[1] In September 2012 the 4,000th Papa John's Pizza restaurant opened, in New Hyde Park, New York. The company celebrated the event by giving away 4,000 free pizzas to customers throughout New York City.[6][14][15]

OperationsEdit

 
A Papa John's in Virginia
 
Countries with Papa John's Pizza (as of 2017)
 
Papa John's in Springboro, Ohio, built specifically for home delivery

Papa John's primarily takes carryout and delivery orders, although some stores have tables and chairs for dining in.

Franchise owners pay a one-off franchise fee of $25,000 per restaurant, then a royalty fee of 5% of net sales, plus a charge for advertising of 8% of net sales. The company requires franchisees to have net worth of at least $250,000, the approximate amount of investment needed.[16][17] Corporate operations look over franchisees to ensure brand consistency. As of January 2016 there were over 4,700 Papa John's restaurants in all 50 U.S. states and in 37 other countries and territories.[1] Papa John's International is a publicly traded company, with 25% of its shares owned by John Schnatter.[18]

In January 2002, Papa John's became the first national pizza chain to make online ordering available to all of its U.S. customers.[19] Most other national chains later added online ordering to their services. On July 10, 2004, Papa John's controlled an estimated 6.6 percent of the market, according to Technomic.[20]

In February 2017, it was reported by the Associated Press that the company was testing a "Papa Priority" $2.99 fee that lets people jump to the head of the line for their pizza order.[21]

Franchises outside the U.S.Edit

Papa John's has operated in the United Kingdom since 2001. In July 2015 the company had 300 shops in the UK,[22] although in 2010 it had had plans for between 400 and 500 within the next five years.[23]

Papa John's operates throughout Ireland, with its head office at Ballybrit, County Galway. The company has over 50 locations and operates mobile units around the country. The franchises are often located adjacent to Supermacs fast food outlets.[24]

All the Papa John's restaurants in Portugal are now closed or have changed name. Some of these locations still serve pizza, though the master-franchise Rest-Smart filed for bankruptcy.[25]

SponsorshipsEdit

On March 30, 2006, Six Flags announced that its parks' pizza would exclusively be from Papa John's. In turn, Six Flags received an annual sponsorship and promotional opportunities from Papa John's. Papa John's is also the official pizza supplier of the Olympic Speedskating Oval in Calgary, Alberta, Canada.

In November 2006, Papa John's signed with ESPN Regional Television to become the title sponsor of the annual PapaJohns.com Bowl, a college post-season football bowl game in Birmingham, Alabama, which Papa John's continued to sponsor through 2010.[26]

In 2010, Papa John's signed an agreement to be the Official Pizza Sponsor of the National Football League and Super Bowls XLV, XLVI and XLVII.[27] In 2011, Papa John's became the official Pizza Sponsor of the NFL in Canada, Mexico and the United Kingdom.[27] In October 2012, Denver Broncos quarterback Peyton Manning became a franchisee in the Denver area for Papa John's, and also purchased 21 franchises in the area.[28] In July 2013, Papa John's announced it had become the Official Pizza Partner of The Football League in the UK.[29]

The company has the naming rights to Papa John's Cardinal Stadium used by the University of Louisville's football team, in exchange for donating $5 million.[30] Schnatter made a further $10 million donation for the stadium's expansion,[30] and extended the naming rights to the year 2040.

Media coverageEdit

Papa John's received attention in May 2008 when a Washington, D.C. franchise distributed T-shirts making fun of Cleveland Cavaliers star player LeBron James at a playoff game against the Washington Wizards. Photographs of the shirts quickly spread from the Internet[31] to Cleveland television. Increasing awareness of the controversy prompted an apology from the Papa John's national headquarters on May 5.[32] To apologize, Papa John's offered large single-topping pizzas for 23 cents (matching James' jersey number) at all locations in Greater Cleveland and throughout northern Ohio. The chain sold over 172,000 pizzas at 23 cents a piece, with customers waiting in lines outside of some stores for as long as three hours.[33]

Papa John's also received media attention on January 6, 2012, when an employee typed the phrase "lady chinky eyes" on a receipt issued to an Asian American customer at a restaurant in New York City.[34] The employee was fired and the company issued a formal apology.[35] A manager at the restaurant where the incident occurred told the New York Post that the cashier, a teenager, did not intend to offend saying, "It's a busy place, and it was a way to identify her and her order. You know, we do stuff like that sometimes. We'll write 'the lady with the blue eyes' or 'the guy in the green shirt.' I think the lady (chinky eyes) put it out there just to get some attention, some people like that type of attention."[36]

Papa John's CEO John Schnatter stated that his business's costs would increase due to the additional expenses associated with the implementation of the Affordable Care Act, and that franchisees would pass those expenses on to the consumer.[37]

On November 1, 2017 it was extensively reported that John Schnatter - again in his role as Papa John's CEO - claimed that poor NFL viewer ratings (due to player protests of police actions[38]) had directly led to decreased same-store sales across Papa John's franchises[39][40]. It was estimated that Schattner's personal holdings in the chain had lost millions in value[41].

LitigationEdit

In 1997, Pizza Hut filed a lawsuit against Papa John's based on a series of advertisements that compared the ingredients of Papa John's and its competitors. At trial, the court agreed with Pizza Hut's argument that Papa John's slogan did not constitute statements of literal fact – that "fresher ingredients" do not necessarily account for a "better" pizza; this ruling was overturned in 2000 when Papa John's appealed the decision. Although the jury's decision on the misleading advertising was upheld, the appeals court determined that Pizza Hut failed to prove, under the requirements of the Lanham Act, that the misleading advertising and puffery had a material effect on consumers' purchasing decisions.

We conclude that (1) the slogan, standing alone, is not an objectionable statement of fact upon which the consumers would be justified in relying, and thus not actionable under section 43(a); and (2) while the slogan, when utilized in connection with some of the post-May 1997 comparative advertising – specifically, the sauce, dough and stuff campaigns – conveyed objectionable and misleading facts, Pizza Hut has failed to adduce any evidence demonstrating that the facts conveyed by the slogan were material to the purchasing decisions of the consumers to which the slogan was directed.[42]

In 2012, the company was the subject of a class-action lawsuit for allegedly sending over 500,000 unwanted text messages to customers. The suit sought over $250 million in damages, though the company settled to pay $16.5 million, awarding members of the class up to $50 in damages, and a free, large, one-topping pizza.[43]

On October 16, 2014, after a year-long investigation by the New York State Attorney General, Eric Schneiderman, five Manhattan Papa John's pizza locations and their parent company New Majority Holding LLC along with its owner, Ronald Johnson, were all sued in the amount of $2,000,000 for unpaid wages. The company is the first to be sued in the Labor Bureau's ongoing investigations of multiple fast-food employers, with Schneiderman stating, "Nobody who works 40 hours a week should have to live in poverty. My office will combat wage theft whenever and wherever we see it in order to protect the rights of hardworking New Yorkers, including pizza delivery workers and others who toil at fast-food restaurants."[44]

In August 2015, Papa John's agreed to pay $12.3 million to settle a class-action lawsuit, filed in 2009, in which the company was accused of undercompensating 19,000 delivery drivers in the states of Arizona, Florida, Illinois, Maryland, Missouri and North Carolina. The complaint, which stated that drivers were typically paid a flat reimbursement amount per delivery that was less than the usual recommended mileage rate, had a "net effect" of the company "willfully fail[ing] to pay the federal minimum wage to their delivery drivers."[45]

In July 2016, Panera Bread filed a lawsuit with the U.S. Eastern District Court in Missouri accusing Papa John's of stealing digital trade secrets and proprietary data management strategies by hiring Michael Nettles, a former Panera executive who was in charge of the chain's corporate digital technologies deployment.[46] In August, a Federal judge issued a restraining order, preventing Nettles from reporting to work at Papa John's while the case was active.[47] Later that year, Panera told the Federal court that it had agreed to drop the lawsuit in December 2016. Details that led to the lawsuit being dropped were not made public.[48]

See alsoEdit

ReferencesEdit

  1. ^ a b c "Our Story". Papa John's International, Inc. Retrieved January 23, 2016. 
  2. ^ "Papa John's Announces Promotion of Steve Ritchie to Chief Operating Officer" (Press release). Papa John's International, Inc. Retrieved February 21, 2015. 
  3. ^ a b c d e f Papa John's International, Inc. Form 10-K for 2013. U.S. Securities and Exchange Commission (Report). February 25, 2014. 
  4. ^ Little Caesars is the third largest pizza chain, but does not deliver.
  5. ^ Wolfson, Andrew (January 13, 2013). "The real Papa John: Pizza entrepreneur John Schnatter makes no apologies for wealth, success, Obamacare remarks | Math whiz mixed pizza passion, finance". The Courier-Journal. Retrieved March 22, 2017. 
  6. ^ a b "The Papa John's Story". Papa John's (GB) Ltd. Archived from the original on July 10, 2013. Retrieved August 2, 2013. 
  7. ^ Shrikant, Adit. "How Dipping Sauce for Pizza Became Oddly Necessary". Eater. Vox Media. Retrieved 28 July 2017. 
  8. ^ "Found: Papa John's Long-Lost Camaro! Kentucky Man Receives $250,000 Finder's Fee" (Press release). Papa John's. August 25, 2009. Retrieved January 17, 2015. 
  9. ^ "Pizza Power 2017 - A State of the Industry Report". PMQ Pizza Magazine. December 2016. Retrieved April 20, 2017. 
  10. ^ Sarah Whitten (31 May 2017). "This is why Little Caesars won't be investing in delivery". Cnbc.com. Retrieved 24 July 2017. 
  11. ^ Otts, Chris (November 7, 2007). "Jeffersontown to dedicate new bike and walking path Saturday". The Courier-Journal. p. C7. Retrieved December 6, 2012. (Subscription required (help)). Papa John's office is in Jeffersontown 
  12. ^ "Papa's Specialty Pizza Challenge". Papa John's Pizza. Archived from the original on August 1, 2010. Retrieved December 6, 2012. Papa John's International Inc., 2002 Papa John's Blvd, Louisville, KY 40299 
  13. ^ 2010 Census – Census Block Map (Index): Jeffersontown city, KY (PDF) (Map). U.S. Census Bureau. 2010. Retrieved December 7, 2012. 
  14. ^ "Papa John's Celebrates Opening of 4,000th Restaurant Worldwide". Papa John's International, Inc. (Press release). September 13, 2012. Retrieved September 16, 2012. 
  15. ^ "Papa John's Int'l. Inc. Franchise Information". Entrepreneur. Retrieved September 16, 2012. 
  16. ^ Hayley Peterson (22 May 2015). "How much it costs to open a Papa John's - Business Insider". Business Insider UK. Retrieved 24 July 2017. 
  17. ^ "U.S. Franchising Opportunities – Requirements & Fees – Papa John's Pizza". Papa John's International, Inc. Archived from the original on May 2, 2012. 
  18. ^ "Ownership Profile". Papa John's International, Inc. Retrieved January 1, 2016. 
  19. ^ "USA: Papa John's first pizza chain to offer nationwide online ordering". Just Food (Press release). January 10, 2002. Retrieved February 18, 2007. 
  20. ^ Barbaro, Michael (July 10, 2004). "Domino's Prepares to Go Public as Pizza Chains Are Challenged". The Washington Post – via HighBeam Research. (Subscription required (help)). 
  21. ^ Staff, Writer (March 1, 2017). "Papa John's testing $2.99 fee for priority orders". Associated Press. Retrieved March 1, 2017. 
  22. ^ Swatman, Rachel (June 29, 2015). "Papa John launches 300th UK store by leading army of staff to pizza making world record". Guinness World Records. Retrieved June 3, 2016. 
  23. ^ Wilson, Amy (August 29, 2010). "Papa-Johns after slice of Domino's pizza action". The Daily Telegraph. Retrieved April 5, 2011. 
  24. ^ "Supermac's". Archived from the original on February 2, 2016. 
  25. ^ "Processo: 1028/09.0TYLSB Insolvência pessoa colectiva (Apresentação) Data: 11-01-2010" (PDF). Diário da República (in Portuguese). 2 (20): 4440. January 29, 2010. Retrieved January 17, 2015. 
  26. ^ Marcello, Brandon (December 15, 2015). "What's the future hold for Birmingham Bowl without title sponsor?". Birmingham News. 
  27. ^ a b "Papa John's Pizza Expands Relationship with NFL by Signing Multi-Year Deal to Be Official Pizza Sponsor of NFL in Canada, Mexico and United Kingdom" (Press release). October 20, 2011. Retrieved September 18, 2016. 
  28. ^ Kercheval, Nancy (October 27, 2012). "Broncos' Peyton Manning to Own 21 Papa John's Pizza Franchises". Bloomberg News. Retrieved October 29, 2012. 
  29. ^ "Papa John's announces Football League sponsorship". The Football League. July 15, 2013. Archived from the original on July 18, 2013. Retrieved August 2, 2013. 
  30. ^ a b George, Stephen (March 10, 2015). "Papa John, Koch brother give multimillion-dollar gifts to U of L". Insider Louisville. Retrieved September 18, 2016. 
  31. ^ "Does Papa John's Pizza Hate the State of Ohio?". So Good Blog. May 3, 2008. Retrieved January 17, 2015. 
  32. ^ Eick, Jon (May 28, 2008). "How Papa John's averted a WOM disaster". iMedia Connection. 
  33. ^ Zicari, Peter (May 9, 2008). "Editors' Picks for Friday from The PD". Cleveland Plain Dealer. Retrieved January 17, 2015. 
  34. ^ Mandell, Nina (January 7, 2012). "Papa John's customer: Pizza joint called me 'lady chinky eyes'". New York Daily News. 
  35. ^ Chittley, Jordan (January 10, 2012). "Papa John's employee fired for racial slur on receipt". Daily Buzz. Yahoo. Retrieved January 17, 2015. 
  36. ^ "Papa John's Fires Employee For Using Racial Slur To ID Korean Woman On Receipt". WCBS-TV. January 8, 2012. Retrieved January 17, 2015. 
  37. ^ Tau, Byron (August 7, 2012). "Papa John's: 'Obamacare' will raise pizza prices". Politico. Retrieved August 14, 2012. 
  38. ^ http://www.truth-out.org/opinion/item/42534-a-year-since-trump-s-election-as-explained-by-terrible-pizza
  39. ^ http://www.businessinsider.com/papa-john-slams-nfl-following-national-anthem-protests-2017-11
  40. ^ http://www.espn.com/nfl/story/_/id/21250448/nfl-sponsor-papa-john-not-happy-anthem-protests
  41. ^ https://www.forbes.com/sites/noahkirsch/2017/11/01/papa-johns-founder-net-worth-falls-70-million-in-hours-blames-nfl-protests/
  42. ^ Pizza Hut, Inc. v. Papa John's Int'l, Inc., 227 F.3d 489, 495 (5th Cir. 2000).
  43. ^ Mirando, Sarah (May 20, 2013). "Papa John's Agrees to $16.5M Text Spam Class Action Settlement". Top Class Actions. Retrieved January 17, 2015. 
  44. ^ "NYC Papa John's pizza franchisee sued for $2 million". Reuters. October 16, 2014. Retrieved January 17, 2015. 
  45. ^ McNair, James (August 7, 2015). "Papa John's To Settle Claims It Underpaid Delivery Drivers". WFPL. Retrieved August 7, 2015. 
  46. ^ Downs, Jere (July 21, 2016). "Panera: Papa John's exec took trade secrets". The Courier-Journal. 
  47. ^ Downs, Jere (August 13, 2016). "Papa John's exec out pending Panera secrets suit". The Courier-Journal. 
  48. ^ Perlman, Matthew (December 22, 2016). "Panera Agrees To Drop Noncompete Suit Against Papa John's". Law360. 

External linksEdit