Once upon a time, you could walk into a Papa John’s Pizza restaurant and walk out with a box with founder and CEO John Schnatter’s beaming face reminding you that “better ingredients make better pizza.” Of course, that was also before something as benign and universally beloved as pizza could become a lightning rod for controversy.
As the story goes, Papa John’s was founded in 1984 when Schnatter converted a broom closet in the back of his father’s tavern in Jeffersonville, Indiana into a makeshift pizzeria and began selling pies to customers. He sold his 1971 Camaro to afford the used pizza equipment, and it wasn’t long before his pies proved to be so popular that he was able to expand into an adjoining space. (Schnatter later got his car back in 2009 after offering a $250,000 reward.)
Just seven years later in 1993, the company went public, and by 1997, it had amassed over 1,500 stores. But what should have been an inspiring story about American entrepreneurship turned ugly when Schnatter found himself embroiled in controversy after controversy, eventually leading to him being completely ousted from his very own company last year.
So what happened? What went wrong? Unfortunately for him, it’s not hard to trace back Schnatter’s increasingly unfortunate ideologies, which we’ve presented in the form of the following timeline.
May, 2012: It was in 2012 that Schnatter began getting involved in politics, during the reelection campaign for President Barack Obama. An outspoken supporter of Mitt Romney, in May of that year, Schnatter even held a fundraiser for the Republican candidate at his home.
August, 2012: It was later that year, however, that Schnatter’s political beliefs first began raising some eyebrows. During a shareholder conference call, the CEO and founder — who at the time was estimated to have been worth $250 million dollars and lived in a 40-thousand square foot home with a 22-car garage — falsely claimed that providing health insurance for employees as part of the Affordable Care Act would force the company to increase the cost of pizza.
“Our best estimate is that the Obamacare will cost 11 to 14 cents per pizza, or 15 to 20 cents per order from a corporate basis,” he said. “If Obamacare is in fact not repealed, we will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto consumers in order to protect our shareholders best interests.”
Schnatter also threatened to cut employee hours to avoid having to pay for their healthcare.
November, 2012: This one is just too weird and bizarre not to include. In 2012 Papa John’s Pizza was sued for $250,000 (coincidentally, Schnatter’s net worth) in a class-action lawsuit for sending spam text messages. Customers were sent a total of 500,000 unwanted messages in early 2010, typically for pizza deals, and some even complained of getting 15 or 16 texts in a row, some even in the middle of the night.
“After I ordered from Papa John’s, my telephone started beeping with text messages advertising pizza specials,” Erin Chutich, one of the plaintiffs, said in a statement. “Papa John’s never asked permission to send me text message advertisements.”
The company eventually settled with claimants for $16.5 million, who were awarded up to $50 in damages, and a free, large, one-topping pizza.
August, 2015: In yet another class-action lawsuit, Papa John’s was accused of under-compensating 19,000 delivery drivers in Arizona, Florida, Illinois, Maryland, Missouri, and North Carolina, due to the fact that the flat reimbursement amount per delivery for drivers failed to equal minimum wage. The company eventually agreed on a $12.3 million payout to workers.
November, 2017: Schnatter’s woes really went into overdrive in 2017 when he ill-advisedly weighed in on the the controversy of NFL players who were peacefully protesting by taking a knee during the national anthem. In yet another conference call, Schnatter blamed his chain’s stock dropping 24 percent that year on “poor leadership” by the NFL.
“This should have been nipped in the bud a year and a half ago,” Schnatter said during a quarterly earnings call with Wall Street analysts. “Like many sponsors, we are in contact with the NFL and once the issue is resolved between the players and the owners, we are optimistic that the NFL’s best years are ahead. But good or bad, leadership starts at the top, and this is an example of poor leadership.”
His sentiments did not go over well, other than with Nazis and white supremacists who rallied around the chain and made Papa’s John’s their “official” pizza — forcing the company to publicly distance itself from the hate groups.
December, 2017: Amid the NFL controversy, weeks later Schnatter stepped down as Papa John’s Pizza CEO, although he continued on with the company as its chairman of the board.
February, 2018: Papa John’s ended its official sponsorship deal with the NFL, opting to focus on local partnerships with NFL teams and personalities in those markets.
Joint statement from NFL & Papa John’s on Papa John’s giving up official pizza sponsorship. pic.twitter.com/KVAW3QNSA1
— Darren Rovell (@darrenrovell) February 27, 2018
July, 2018: Because Schnatter apparently never learns his lesson, it surfaced in July of 2018 that a few months prior back in May, he had casually dropped the N-word during a conference call, when asked how he planned to distance himself from racist groups. “Colonel Sanders called blacks n*****s,” he said in an apparent way of downplaying his previous NFL remarks, and then went on to complain that Sanders had never faced public backlash.
Schnatter tendered his resignation from Papa John’s shortly after the news of his comments broke. Within days, Papa John’s executives made the decision to remove Schnatter’s image from all Papa John’s marketing materials.
July, 2018: Schnatter sued Papa John’s on alleged grounds that the company’s board of directors acted too quickly in seeking his dismissal. He also backtracked on his use of the N-word, claiming that the Forbes article that broke the news “falsely accused him of using a racial slur.”
“The truth, and John’s consistent point, has been that John quoted the word and did not use the word, commented Schnatter’s attorney on the lawsuit. “There is a world of difference between using the word as a slur—demeaning someone by calling them that word—and quoting that word.”
OK sure. But also, you just don’t say the word!
August, 2018: In addition to the lawsuit, Schnatter took matters into his own hands with a “Save Papa John’s” website.
“I built Papa John’s from the ground up and remain its largest shareholder. I love my Company, its employees, franchisees and customers,” the homepage boldly declared, before it was eventually removed (probably due to legal reasons). “The Board wants to silence me. So this is my website, and my way to talk to you.”
November, 2019: More than a year after Schnatter’s forced resignation, he finally spoke out about his former company in a terrifying and bonkers interview with a local Louisville Fox affiliate.
The Papa John interview is lovely pic.twitter.com/bpDMDm9t9G
— Timothy Burke (@bubbaprog) November 26, 2019
As usual, Schnatter did little to help his case, accusing former CEO Steve Ritchie and the board of directors of using the black community and race as a “way to steal the company.”
“I’ve had over 40 pizzas in the last 30 days, and it’s not the same pizza,” he later inexplicably volunteered. “It’s not the same product. It just doesn’t taste as good. The way they’re making the pizza is just not fundamental to what makes a Papa John’s pizza.”
December, 2019: Schnatter’s wife of over 30 years filed for divorce on December 5, 2019, although the couple had apparently been separated since April. We can’t imagine why!