ControversyPapa John's Controversy Chronology, from The Slur to The Payment!

Papa John’s Controversy Chronology, from The Slur to The Payment!

The Papa John’s dispute has been going on for so long that you might have forgotten how it started, like a leftover pizza in the office fridge.

Here’s a quick recap of what happened, from the contentious conference call that sparked the controversy to the resignation of business founder John Schnatter from the board of directors.

It can take some time, so pull up a chair.

Papa John Controversy

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Schnatter Acknowledges Using a Racial Slur: July 11, 2018

Wednesday was a lengthy day.

First, it was revealed by Forbes that Schnatter, a self-made billionaire from Jeffersonville who had been the company’s spokesperson for years, had claimed that “Colonel Sanders called blacks n——-s” without receiving any negative feedback. He said those things during a conference call in May where he was role-playing scenarios to understand how to answer inquiries about racial issues.

According to the report, several callers were outraged despite Schnatter’s apparent intention to convey his own revulsion with bigotry.

Quickly came the backlash.

In a statement, Schnatter acknowledged making the comments. He then announced his resignation from the board of trustees of the University of Louisville. Later that evening, he gave up his position as chairman of Papa John’s. Schnatter’s name was likewise erased from the gym at Jeffersonville’s historic Nachand Fieldhouse.

Day 1 ended then.

Additional Comments: July 12, 2018

A day later, the consequences persisted. On Thursday, the city of Jeffersonville returned a $400,000 donation from Schnatter, Major League Baseball halted its “Papa Slam” pizza campaign with the company, and the company’s stock prices started to rise after dropping $96 million in market value on Wednesday.

Renaming of Papa John’s Cardinal Stadium: July 13, 2018

Your standard news dump on Friday: The University of Kentucky severed ties with Schnatter, his likeness was removed from Papa John’s marketing and advertising, and in a shocking move, the new president of the University of Louisville, Neeli Bendapudi, declared that the name of the corporation would be removed from the school’s football stadium, Papa John’s Cardinal Stadium. At the time, the Louisville football team praised the action.

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Papa John Controversy

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The Remaining Days of July 2018: Schnatter Sues Papa John’s

July was really busy after that.

Schnatter declared his intention to contest being kicked off the company’s board of directors and engaged renowned Los Angeles trial attorney Patricia Glaser to represent him.

According to Forbes, Schnatter was involved in “sexually inappropriate conduct” at the Papa John’s Louisville headquarters and contributed to the establishment of a “toxic” work environment. Schnatter’s attorney refuted these claims.

Papa John’s attempted to remove Schnatter from the board but was unsuccessful in stopping him from acquiring a majority of the company’s shares.

People “know (he’s) not a racist,” according to Schnatter, who concluded the month by suing Papa John’s for failing to properly investigate the allegations made in the Forbes piece.

Got it all? August will now be discussed.

Sales Decline and Schnatter Sues Once More: July 2018

The warmth persisted. Schnatter stated that the company “performs better with me involved” and that he was “really concerned” about dropping sales, which led to Papa John’s shares, as expected, to an all-time low.

To help its franchisees who had suffered losses as a result of the scandal, Papa John’s stated it would reduce food costs and other expenses and take additional steps.

On August 21, Schnatter purchased a full-page advertisement in the Courier-Journal addressed to “fellow team members,” expressing his “most regret” and promising that “we will all get through this together.”

Moreover, on the last day of the month, Schnatter filed yet another complaint against Papa John’s, pleading with the courts to help him “stop the irreparable harm (company directors) are creating due to their repeated, and ongoing, breaches of the responsibilities of loyalty and care they owe to the firm.”

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The Aftermath Persists in September 2018

In the wake of the controversy, Papa John’s may be put up for auction, according to Reuters. The corporation then suggested eliminating the apostrophe from its “Papa John’s” logo.

Papa John Controversy

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Restructuring of The Business: October 2018

As part of a corporate restructure, longtime food industry leader Mike Nettles was appointed to COO of Papa John’s, and Schnatter persuaded the board to remove an emergency clause preventing him and his family from acquiring a controlling position in the business.

Reduced Sales in November 2018

There were rumors that a sale of the business was imminent and that four companies were interested in purchasing Papa John’s.

That action was taken after third-quarter figures revealed a nearly 10% decline in pizza sales.

Trian Fund Management LP dropped its bid to buy the business at the end of the month.

Additionally, on a lighter note, the band directors at the University of Louisville said they did not support marching band members who chanted “Papa John’s a traitor” prior to the Cardinals’ lopsided loss to NC State in Louisville.

2019 January Schnatter Wins in Court

A judge decided that Schnatter should be permitted to study the information he had demanded from Papa John’s during his lawsuit filed in July, giving the founder a victory in court to start the new year.

Major Interest Sold by Papa John’s in February 2019

According to Reuters, Papa John’s would rather sell a portion of its business after offers to buy the company outright fell short of the company directors’ expectations.

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Days later, Papa John’s announced it would appoint a restaurant turnaround specialist to oversee its board of directors and sold a $200 million share in the business to Starboard Value LP.

Sales at Papa John’s decreased by 8.1% in the fourth quarter.

In a Deal, Schnatter Leaves the Board in March 2019.

On March 5, Schnatter and the business came to an agreement and declared a truce. Schnatter gave up his position on Papa John’s board of directors and consented to have his two lawsuits against the firm dismissed, but he was still permitted to work with other shareholders and had a vote in who would take his place.

As the business selects a new CEO, Schnatter sells more than 700,000 shares: August 2019
As a result of selling more than 700,000 shares over the course of three days in August 2019, Schnatter earned more than $30 million. The common price of the shares was roughly $43.

Later, on August 27, Papa John’s announced that Arby’s President Rob Lynch would succeed Steve Ritchie as the company’s president and CEO, effective right now.

Several Courier Journal reporters, including Grace Schneider, Andrew Wolfson, Morgan Watkins, and others, contributed to this story.


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