Papa John's Pizza

Papa John's International, Inc.
Papa John's Pizza
Public (NASDAQ: PZZA)
Industry Pizza, Pizza Delivery
Founded October 2, 1984 (1984-10-02)
Founder John Schnatter
Headquarters Jeffersontown, Kentucky
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]
Slogan "Better Ingredients. Better Pizza."
Website papajohns.com

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

Overview

The Papa John's restaurant franchise was founded in 1983 when "Papa" John Schnatter knocked out a broom closet in the back of his father's tavern, Mick's Lounge, in Jeffersonville, Indiana.[4] He then sold his 1971 Z28 Camaro to purchase $1,600 worth of used pizza equipment and began selling pizzas to the tavern's customers out of the converted closet.[5] His pizzas proved so popular that one year later he was able to move into an adjoining space. In 2009, Schnatter got the Camaro back by contacting the family that he sold the car to in 1983.[6]

As of 2015, the company is the third largest take-out and pizza delivery restaurant chain in the world[7][8] with headquarters in Jeffersontown, Kentucky, near Louisville.[9][10][11] Its slogan is "Better Ingredients. Better Pizza. Papa John's."

Papa John's has 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, Papa John's Pizza opened its 4,000th restaurant, in New Hyde Park, New York. The company celebrated the event by giving away 4,000 free pizzas to customers throughout New York City.[5][12][13]

Operations

A Papa John's in Virginia
Countries with Papa John's Pizza (as of 2007)
Papa John's in Springboro, Ohio, built specifically for home delivery
Papa John's in Santo Domingo, Dominican Republic

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

Franchise stores owners pay a royalty fee 5% of net sales to Papa John's International, and up to 7% of net sales on advertising efforts.[14] Corporate operations look over franchisees to ensure brand consistency. As of January 2016, there are over 4,700 Papa John's restaurants worldwide, including locations 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.[15]

In January 2002, Papa John's became the first national pizza chain to make online ordering available to all of its U.S. customers.[16] Most other national chains subsequently 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.[17]

UK franchise

Papa John's has operated in the United Kingdom since 2001. In July 2015 the company had 300 shops in the UK[18] with plans for between 400 and 500 within 5 years.[19]

Cyprus franchise

Papa John's has operated in Cyprus since 2006. Currently is operating with 12 stores in all major cities.

Portugal franchise

All the Papa John's restaurants in Portugal are now closed or have changed names. Some of these locations still serve pizza, though the master-franchise Rest-Smart filed for bankruptcy.[20]

Irish franchise

Papa John's currently 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.[21]

Promotions

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.[22] In August 2010, Papa John's Corporate signed a multiple-year deal with the National Football League (NFL) to be their official pizza restaurant. 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.[23] In July 2013, Papa John's announced it had become the Official Pizza Partner of The Football League in the UK.[24]

Sponsorship

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.[25] Schnatter made a further donation for the stadium's expansion, and extended the naming rights to the year 2040.

Wages

According to salary reports at Glassdoor, Papa John's delivery drivers typically make between $7.31 and $7.45 an hour in the United States. Shift Managers are reported to receive $10.04/hr. Managers are reported to make over double these salaries.[26] The company's president, John Schnatter earned $1,696,087 for his salary in 2014.[27]

Media coverage

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[28] to Cleveland television. Increasing awareness of the controversy prompted an apology from the Papa John's national headquarters on May 5.[29] 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.[30]

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.[31] The employee was fired and the company issued a formal apology.[32] 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."[33]

Papa John's CEO John Schnatter stated that his business' 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.[34]

In January 2015, a Papa John's franchise in Decatur, Georgia, received media attention due to an attempted robbery incident involving one of its delivery drivers.[35] It was reported that the unnamed employee was approached by 24-year-old Donquaz Stevenson, who forced her to the ground in an attempted carjacking. The employee was carrying a handgun and defended herself, firing at Stevenson who was later charged with armed robbery and taken to a local hospital. Local television station WSB-TV reported that the employee was worried about losing her job because she was carrying a firearm at work for protection. In an e-mail statement, the Papa Johns company said it would not fire the employee and also stated, "The safety of Papa John's employees is a top priority for our company.... Upon investigation and considering the specific facts of the situation, we have reassigned the employee to work in the store and are offering her counseling to help her recuperate from the incident."[35]

Litigation

Pizza Hut

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.[36]
Spam

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.[37]

Unpaid wages in NYC

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 on October 16, 2014. 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."[38]

Undercompensated delivery drivers in six U.S. states

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."[39]

See also

References

  1. 1 2 3 "Our Story". Papa John's International, Inc. Retrieved 2016-01-23.
  2. ↑ "Papa John's Announces Promotion of Steve Ritchie to Chief Operating Officer". Papa John's International, Inc. Retrieved February 21, 2015.
  3. 1 2 3 4 5 6 Papa John's International, Inc. Form 10-K, Securities and Exchange Commission, February 25, 2014
  4. ↑ "About Us". Papa John's. Retrieved January 17, 2015.
  5. 1 2 "The Papa John's Story". Papa John's (GB) Ltd. Retrieved August 2, 2013.
  6. ↑ "Found: Papa John's Long-Lost Camaro! Kentucky Man Receives $250,000 Finder's Fee". Papa John's. August 25, 2009. Retrieved January 17, 2015.
  7. ↑ "Papa John's offering free pizza to customers who place online order during Super Bowl weekend". WDRB. January 28, 2015. Retrieved March 9, 2015.
  8. ↑ Green, Kim (January 15, 2015). "Sunday With Papa John's Founder John Schnatter". Parade. Retrieved March 9, 2015.
  9. ↑ "Jeffersontown to dedicate new bike and walking path Saturday". The Courier-Journal. November 7, 2007. p. C7. Retrieved December 6, 2012. Papa John's office is in Jeffersontown
  10. ↑ "Papa's Specialty Pizza Challenge". Papa John's Pizza. Retrieved on December 6, 2012. "Papa John's International Inc., 2002 Papa John's Blvd, Louisville, KY 40299". Archived August 1, 2010, at the Wayback Machine.
  11. ↑ 2010 "Census – Census Block Map (Index): Jeffersontown city, KY 1". U.S. Census Bureau. Retrieved on December 7, 2012.
  12. ↑ "Papa John's Celebrates Opening of 4,000th Restaurant Worldwide". Retrieved September 16, 2012.
  13. ↑ "Entrepreneur.com – Franchise Information". Retrieved September 16, 2012.
  14. ↑ U.S. Franchising Opportunities – Requirements & Fees – Papa John's Pizza Archived May 2, 2012, at the Wayback Machine.
  15. ↑ "Ownership Profile - Papa John's International, Inc.". ir.papajohns.com. Retrieved January 1, 2016.
  16. ↑ "USA: Papa John's first pizza chain to offer nationwide online ordering". Retrieved February 18, 2007.
  17. ↑ Michael Barbaro (July 10, 2004). "Domino's Prepares to Go Public as Pizza Chains Are Challenged". The Washington Post.
  18. ↑ Rachel Swatman (June 29, 2015). "Papa John launches 300th UK store by leading army of staff to pizza making world record". http://www.businesswire.com/. Retrieved April 8, 2015. External link in |work= (help)
  19. ↑ Wilson, Amy (August 29, 2010). "Papa-Johns after slice of Domino's pizza action.". The Telegraph. Retrieved April 5, 2011.
  20. ↑ "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.
  21. ↑ "Supermac's".
  22. ↑ What's the future hold for Birmingham Bowl without title sponsor?, AL.com
  23. ↑ "Broncos' Peyton Manning to Own 21 Papa John's Pizza Franchises". October 27, 2012. Retrieved October 29, 2012.
  24. ↑ "Papa John's announces Football League sponsorship". The Football League. July 15, 2013. Retrieved August 2, 2013.
  25. ↑ "Louisville Football – Papa John's Cardinal Stadium – ESBN". ESBN. Retrieved December 5, 2012.
  26. ↑ "Papa John's Salaries". Glassdoor. Retrieved July 16, 2015.
  27. ↑ "PAPA JOHNS INTERNATIONAL INC Executive Salaries & Other Compensation - Salary.com". Salary.com. Retrieved July 16, 2015.
  28. ↑ "Does Papa John's Pizza Hate the State of Ohio?". Sogoodblog.com. May 3, 2008. Retrieved January 17, 2015.
  29. ↑ Eick, Jon. How Papa John's averted a WOM disaster, iMedia Connection, May 28, 2008.
  30. ↑ Peter Zicari (May 9, 2008). "Editors' Picks for Friday from The PD". Cleveland.com. Retrieved January 17, 2015.
  31. ↑ Mandell, Nina (January 7, 2012). "Papa John's customer: Pizza joint called me 'lady chinky eyes'". Daily News (New York).
  32. ↑ Jordan Chittley (January 10, 2012). "Papa John's employee fired for racial slur on receipt". Daily Buzz (Yahoo). Retrieved January 17, 2015.
  33. ↑ "Papa John's Fires Employee For Using Racial Slur To ID Korean Woman On Receipt". CBS New York. January 8, 2012. Retrieved January 17, 2015.
  34. ↑ Tau, Byron (August 7, 2012). "Papa John's: 'Obamacare' will raise pizza prices". Politico. Retrieved August 14, 2012.
  35. 1 2 Corbin, Cristina (January 15, 2015). "Papa John's Pizza stands by employee who shot armed robber in self defense". Fox News. Retrieved January 16, 2015.
  36. ↑ Pizza Hut, Inc. v. Papa John's Int'l, Inc., 227 F.3d 489, 495 (5th Cir. 2000).
  37. ↑ Sarah Mirando (May 20, 2013). "Papa John's Agrees to $16.5M Text Spam Class Action Settlement". Top Class Actions. Retrieved January 17, 2015.
  38. ↑ "NYC Papa John's pizza franchisee sued for $2 million". Reuters. October 16, 2014. Retrieved January 17, 2015.
  39. ↑ McNair, James (August 7, 2015). "Papa John's To Settle Claims It Underpaid Delivery Drivers". WFPL. Retrieved August 7, 2015.

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