Papa John's Pizza

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Papa John's Pizza
TypePublic (NASDAQPZZA)
Industrysandwiches, pizza
FoundedOctober 2, 1984
HeadquartersLouisville, Kentucky, U.S.A.
Key peopleJohn Schnatter, Founder & CEO
J. Jude Thompson, President & Co-CEO[1]
RevenueIncrease US$ 01.126,397 billion (2010)[1]
Operating incomeDecrease US$ 086.744 million (2010)[1]
Net incomeDecrease US$ 0051.940 million (2010)[1]
Total assetsIncrease US$ 415.941 million (December 26, 2010)[1]
Total equityIncrease US$ 207.200 million (December 26, 2010)[1]
Employees16,000 (2010)[1]
Websitepapajohns.com
 
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Papa John's Pizza
TypePublic (NASDAQPZZA)
Industrysandwiches, pizza
FoundedOctober 2, 1984
HeadquartersLouisville, Kentucky, U.S.A.
Key peopleJohn Schnatter, Founder & CEO
J. Jude Thompson, President & Co-CEO[1]
RevenueIncrease US$ 01.126,397 billion (2010)[1]
Operating incomeDecrease US$ 086.744 million (2010)[1]
Net incomeDecrease US$ 0051.940 million (2010)[1]
Total assetsIncrease US$ 415.941 million (December 26, 2010)[1]
Total equityIncrease US$ 207.200 million (December 26, 2010)[1]
Employees16,000 (2010)[1]
Websitepapajohns.com

Papa John's Pizza (NASDAQPZZA) is the third largest take-out and delivery pizza restaurant chain in the United States (behind Pizza Hut and Domino's Pizza);[2] its headquarters is in Louisville, Kentucky. Papa John's slogan is "Better Ingredients. Better pizza. Papa John's"

Internationally, there are over 4,000 Papa John's establishments, including over 2,600 in the U.S. and the remainder spread among 32 other countries. In September 2012, Papa John's Pizza opened its 4,000th restaurant in New Hyde Park, NY. The company celebrated the event by giving away 4,000 free pizzas to customers throughout New York City.[3][4][5]

Contents

History

The founder of Papa John's, John Schnatter, began his pizza career at Rocky's Sub Pub in Jeffersonville, Indiana, while attending Jeffersonville High School. Schnatter graduated from Jeffersonville High in 1980, and continued his association with the pizza business while attending Ball State University, working as a delivery driver for Greek's Pizzeria in Muncie. Upon graduating, he began working for his father, who was co-owner of the bar (Spaghett's Lounge) in Jeffersonville. In 1984, he sold his car (a 1971 Chevrolet Camaro Z28) to buy out the other owner of the bar, and started serving pizza to customers.[citation needed]

Site of the first Papa John's

Papa John's credits its growth to great customer service, quality products, and menu simplicity, in contrast with other chains' focus on low prices. Fewer options in crust styles and side dishes simplify inventory management, meaning the focus remains on quality. However, since the mid-1990s, Papa John's has followed the industry trend and greatly expanded its menu options, adding thin-crust, pan pizza, and whole wheat crust options; "robusto", barbecue, and Alfredo sauces. There also are 10 specialty pizzas, many with new toppings and new cheeses; chicken strips and four flavors of chicken wings; dessert pastries, such as apple pie; and new variations of bread sticks and cheese sticks.[citation needed]

The thin crust has been advertised as crispier than others (similar to St. Louis-style pizza) and the "robusto" sauce introduced with the pan crust has chunky tomato pieces and more vibrant spice notes. To simplify in-store operations and to provide product consistency between stores, many functions such as dough production are carried out by an off-site commissary system similar to that of most other fast food chains.[citation needed]

In late 2009, the company made a partial return to offering a relatively narrow range of menu items. The Papa Perfect Pan Pizza, the whole wheat crust, and the robusto style sauce were discontinued.[citation needed]

Lawsuit

We conclude that (1) the slogan, standing alone, is not an objectionable statement of fact upon which 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.

Summary statement from appellate decision in Pizza Hut, Inc. v. Papa John’s Int’l, Inc.

In 1997, Pizza Hut filed suit 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.[6]

Business ventures

A Papa John's in Virginia.
Countries with Papa John's Pizza.
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. Papa John's offers online ordering throughout the United States, automatically assigning all registered customers to the closest location.[citation needed]

In Ireland, many Supermac's restaurants serve Papa John's Pizza.[citation needed]

The structure of a Papa John's restaurant is typical of that seen in many fast-food outlets, with a salaried store manager presiding over day-to-day operations, and several salaried or hourly assistant managers and shift managers presiding over in-store and delivery team members. Above the store management is an area supervisor who is generally supervised by a franchisee or; in corporate stores, a director of operations reports to an operational vice president.[citation needed]

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.[7] Corporate operations looks over franchisees to ensure brand consistency.

As of January 2008, there were over 3,330 Papa John's restaurants operating in all 50 U.S. states and in 30 other countries. Papa John's International is a publicly traded company, with 30% of shares owned by John Schnatter.[citation needed]

Papa John's became one of the first major pizza chains to include a garlic butter dipping sauce with every original crust or square pan pizza, as well as a peperoncini pepper, a traditional Italian spice.[citation needed]

In January 2002, Papa John's became the first national pizza chain to make online ordering available to all of its U.S. customers.[8] Most other national chains subsequently added online ordering to their services. Online ordering is also available in Canada, South Korea, the United Kingdom, and Ireland.[citation needed]

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. On November 16, 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.[citation needed]

Papa John's is credited with developing the most advanced dynamic resource control infrastructure in the fast food industry. Sources within the company have stated the centralized network is modeled after NORAD's Cheyenne Mountain Operations Center. As of January 2007, all Papa John's retail locations were linked via fiber optic cables to national headquarters.[9] Real-time updates are made at the company's Louisville national inventory control center, where operations research experts (many recruited from the 2002 layoffs at Enron) allocate deliverymen and pizza ingredients to areas experiencing surges in pizza demand.[10]

In early 2010, Papa John Corporate rolled out a new idea. Customers were to design their own specialty pizzas, submit them to Papa John's Corporate, with the hope of winning pizza for life. Papa Johns received a number of specialty pizza choices. After a few judging competitions, by a number of judges, the list of specialty pizza choices dwindled to three - The Working Fire, The Big Bonanza, and the Cheesey Chicken Cordon Blue.

In late July the three choices were presented to the people for their final vote. The specialty pizza with the most sales will be queened as the new specialty pizza, and will remain on Papa John's Menu for one year. After July sales ended the Cheesey Chicken Cordon Blue had won with an undisclosed number of sales - and will remain on Papa John's Menu for one year.[citation needed]

In August 2010, Papa John's Corporate signed a multiple-year deal with the National Football League (NFL) to be their official pizza restaurant.[citation needed]

Papa John's is currently the sponsor of the NBA D-League Game of the Week presented by Versus.[citation needed]

Controversy

Papa John's received negative media 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 blogosphere[11] to Cleveland television. Increasing awareness of the controversy prompted an apology from the Papa John's national headquarters on May 5.[12] 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.[13]

Papa John's also received negative media attention on January 6, 2012, when an employee typed the racial slur "lady chinky eyes" on a receipt issued to an Asian American customer at a restaurant in New York City.[14] The employee was fired and the company issued a formal apology.[15] However, an unapologetic manager at the restaurant where the incident occurred who would identify himself only as Jerome 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."[16] The incident received widespread negative media attention, including The Washington Post, the New York Daily News and ABC News.

Papa John's Founder and CEO, John Schnatter, made statements during an earnings call on August 1, 2012 regarding the potential costs that would be incurred to the company as a result of the Patient Protection and Affordable Care Act (also referred to as "Obamacare") directly after making statements regarding "healthier bonuses" for employees and shareholders while conference call attendees (including Chris O'Cull from Key Bank) stated "I agree with you John, I like it when employees get paid big bonuses (laughter)".[17][18] Schnatter's comment - "We're not supportive of Obamacare" - was widely reported.[19]

Other trade names

Papa John's operated under the company name "Papiano's" in East Lansing, Michigan, because a pre-existing local chain of pizza restaurants in this area already laid claim to the name "Papa John's" before the major chain was formed.[20] The location closed in 2008 and reopened as another pizzeria.[21]

UK franchise

Papa John's has operated in the UK since 2001. In May 2011 the company had 156 shops in the UK with plans for between 400 and 500 within 5 years.[22]

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.[23]

See also

References

  1. ^ a b c d e f g "PZZA_2010_Annual_Report". Papa John's Pizza. http://files.shareholder.com/downloads/PZZA/1737511176x0x453082/69A638FF-89A3-48B5-A141-B816620D3E5F/PZZA_2010_Annual_Report.pdf. 
  2. ^ Pizza Magazine - September 2008
  3. ^ "Papa John's Celebrates Opening of 4,000th Restaurant Worldwide". http://ir.papajohns.com/releaseDetail.cfm?ReleaseID=706740. Retrieved 16 September 2012. 
  4. ^ "The Papa John's Story". http://www.papajohns.com/pj_story/index.htm. Retrieved 16 September 2012. 
  5. ^ "Entrepreneur.com - Franchise Information". http://www.entrepreneur.com/franchises/papajohnsintlinc/282662-0.html. Retrieved 16 September 2012. 
  6. ^ Pizza Hut, Inc. v. Papa John’s Int’l, Inc., 227 F.3d 489, 495 (5th Cir. 2000).
  7. ^ U.S. Franchising Opportunities - Requirements & Fees - Papa John's Pizza
  8. ^ "USA: Papa John's first pizza chain to offer nationwide online ordering". http://www.just-food.com/article.aspx?ID=74126&lk=np. Retrieved 2007-02-18. 
  9. ^ "Technical Analysis of Papa John's Inventory Control". http://www.bsu.edu/cob/media/pdf/bsbspring2006.pdf. Retrieved 2007-01-10. 
  10. ^ "The Fall of Enron and Effects on other American Corporations". http://www.ingentaconnect.com/content/aea/jep/2003/00000017/00000002/art00001. Retrieved 2007-01-10. 
  11. ^ Sogoodblog.com, May 3, 2008.
  12. ^ Eick, Jon. How Papa John's averted a WOM disaster, iMedia Connection, May 28, 2008.
  13. ^ Papa John's Serves up 23 Cent Pizzas
  14. ^ Mandell, Nina (January 7, 2012). "Papa John's customer: Pizza joint called me 'lady chinky eyes'". Daily News. http://articles.nydailynews.com/2012-01-07/news/30603058_1_receipt-tweeted-papa-john. 
  15. ^ Papa John’s employee fired for racial slur on receipt from Yahoo 10 January 2012
  16. ^ "Papa John’s Fires Employee For Using Racial Slur To ID Korean Woman On Receipt". http://newyork.cbslocal.com/2012/01/08/woman-claims-papa-johns-used-racial-slur-to-id-her. 
  17. ^ "Conference Call Audio, relevant audio begins at 14:10". http://ir.papajohns.com/common/download/download.cfm?companyid=PZZA&fileid=588160&filekey=92d0378a-086f-43af-9421-f31f6bf0c4c0&filename=. 
  18. ^ "Papa John's Corporate Earnings Call Download Website". http://ir.papajohns.com/events.cfm. 
  19. ^ Tau, Byron (August 7, 2012). "Papa John's: 'Obamacare' will raise pizza prices". Politico. http://www.politico.com/politico44/2012/08/papa-johns-obamacare-will-raise-pizza-prices-131331.html. Retrieved 14 August 2012. 
  20. ^ Welcome To Papa John's Pizza
  21. ^ Kanan, Jeff (2008-11-06). "Popula Wis. pizza chain expants to E.L.". The State News. http://www.statenews.com/index.php/article/2008/11/popular_wis_pizza_chain_expands_to_el. Retrieved 2009-03-16. 
  22. ^ Wilson, Amy (2010-08-29). "Papa-Johns after slice of Domino's pizza action.". The Telegraph. http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/7970736/Papa-Johns-after-slice-of-Dominos-pizza-action.html. Retrieved 2011-04-05. 
  23. ^ DRE.pt

External links