Schnatter and Papa Johns Working Toward Settlement Agreement
Papa John’s, one of the top pizza brands in the country, has spent the past year or so reeling from a mix of bad press and uncertainty focusing on its founder, John Schnatter. The split between the company and the former CEO has been contentious, prolonged, and publicly ugly, with Schnatter leaving it all out there in the press as to how he felt and what he believed about the growing rift.
Now, finally, the news is out that Papa John’s is moving forward toward a settlement with its founder, who was ousted from the board after a brush with negative PR over comments he made in a training meeting. But that PR dustup was only one prong in the fight that eventually decided the fate of the world’s third-largest pizza delivery company.
According to multiple media sources, Schnatter has agreed to work with a “mutually acceptable independent director” who will determine the details of an eventual settlement that will extricate the founder from his company.
Details of the settlement being floated in the press include that Schnatter would resign from the board before the next stockholder meeting, and that he would also dismiss his lawsuits against the company in two different counties.
The suits are among several filed by Schnatter in a bid to retake control of the company he famously founded out of a closet. But that would just end the legal battle. The PR battle would be ongoing.
Schnatter, who had been the public face of his company for years, appearing in countless TV commercials promoting his pizza alongside luminaries from the world of sports, created a series of PR issues dating back to 2017. The first PR misfire came when Schnatter publicly criticized NFL leadership, blaming their inaction on the anthem protests for Papa John’s drop in sales.
Those comments not only created an issue for Papa John’s, it created a positive PR opportunity for the competition. Pizza Hut and others let the world know they were doing very well, thank you much, playfully poking at Papa John’s in the press.
Schnatter eventually walked back his statements, but it was an unforced error for the CEO. Later, he was recorded using a racial slur as an example in training conference call. Schnatter tried to recant this, claiming it was not meant as a slur, but only used as an example of improper speech. Context, though, was not what people wanted to hear. Schnatter found himself on increasingly thinning ice, leading to a historically acrimonious exit from the company. Papa John’s needs to put this long series of negative headlines behind them quickly if the company hopes to reset and move forward with more positive press.