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Don’t Be Like Papa John


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I’ve never met Papa John’s founder John Schnatter, but his recent decisions as CEO have exposed the company and its shareholders to needless ire. There are a lot of valid external reasons that could be blamed for lowering future sales projections, but pointing to something as divisive as NFL players taking a knee is absurd—and other leaders should never put their brands in a similar position.

Whether it’s right or wrong, American consumers speaking with their wallets in response to corporations making political statements is the unofficial law of the land. Now, as Papa John’s is being raked across the coals on social media channels, it’s hard to find a silver lining in Schnatter's statements during the Q3 earnings call that sent shares plummeting and, according to Forbes, slashed his own net worth by more than $70 million.

I’ve heard the bad weather excuse plenty of times in response to poor earnings figures, and there are plenty of instances where that makes a lot of sense. By saying “the NFL has hurt us by not resolving the current debacle,” one of several NFL references in the call, Schnatter has alienated millions of customers and damaged his own leadership as the head of a major public company.

There’s truth in his words that NFL ratings are down, but there are several potential reasons for this outside of politics. And, even if player protests were the most significant factor in cooling TV ratings, it seems somewhat crazy for the pizza CEO to willingly expose the company and its shareholders to the backlash that just about anybody could have predicted.

But there are also many reasons why Papa John’s isn’t performing as well as its competitors, which undoubtedly have a more material impact on the brand’s quarterly performance. Domino’s is still knocking it out of the park with smart marketing and massive investments in future-looking technologies. Pizza Hut is aggressively playing catch up, and there is so much new competition in the category from fast-casual pizza concepts and regional pizza brands that are fighting for a seat with the big boys.

And then of course there’s the brutal comparison many have shared on Twitter about Little Caesars late founder Mike Ilitch paying Rosa Parks’ rent in downtown Detroit for more than a decade. Again, brutal optics for Papa John’s.

Just about everything is politicized in this era, and that can unfairly impact companies that get swept up in the national conversation. There’s no indication this is changing anytime soon. Whether your company is public or private, there are employees, suppliers, their families and customers whose livelihoods are attached to any brand’s fortunes. Consider their interests carefully before risking so much to make a personal political statement—especially during an earnings call.

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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Tom KaiserTom Kaiser is associate editor of Franchise Times. He can be reached at 612.767.3209, or send story ideas to tkaiser@franchisetimes.com.
 
Beth EwenBeth Ewen is editor-in-chief of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
 
Nicholas UptonNicholas Upton is staff writer at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
 
Mary Jo LarsonLaura Michaels is managing editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
 
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at
 twitter.com/mlarson1011.
 
Nancy WeingartnerNancy Weingartner is editor-at-large of Franchise Times magazine and the editor of the Food On Demand media project. You can reach her at 612-767-3200 or at nancyw@franchisetimes.com.
Follow her on Twitter at http://twitter.com/nanweingartner.
 

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