Papa John's Pizza

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Papa John's International, Inc.
Type Public (NASDAQPZZA)
Industry Pizza, Pizza Delivery
Founded October 2, 1984
Headquarters Jeffersontown, Kentucky
Key people John Schnatter, Founder & CEO
Tony Thompson, President & COO (December 30, 2012)[1]
Revenue Increase US$ 1.439 billion (December 30, 2013)[2]
Operating income Increase US$ 106.5 million (December 30, 2013)[2]
Net income Increase US$ 69.537 million (December 30, 2013)[2]
Total assets Increase US$ 464.291 million (December 30, 2013)[2]
Total equity Decrease US$ 138.184 million (December 30, 2013)[2]
Employees 20,700 (December 30, 2013)[2]
Website papajohns.com

Papa John's Pizza is an American restaurant company and is the fourth largest take-out and pizza delivery restaurant chain in the United States[3] with headquarters in Jeffersontown, Kentucky, near Louisville.[4][5][6] Its slogan is "Better Ingredients. Better Pizza. Papa John's."

Internationally, there are over 4,000 Papa John's establishments, including over 3,200 in the U.S. and the remainder spread among 33 other countries. 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.[7][8][9]

History[edit]

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.[10] 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.[8] (In 2009, Schnatter got the Camaro back by contacting the family that he sold the car to in 1983.[11]) His pizzas proved so popular that one year later he was able to move into an adjoining space. Papa John's is now the fourth largest take-out and delivery pizza restaurant chain in the United States.[3]

Pizza Hut lawsuit[edit]

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."[12]

Spam lawsuit[edit]

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 $16.5M, awarding members of the class up to $50 in damages, and a free, large, one-topping pizza.[13]

Business ventures[edit]

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 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 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]

In January 2002, Papa John's became the first national pizza chain to make online ordering available to all of its U.S. customers.[15] 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.[16]

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]

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]

In October 2012, NFL quarterback Peyton Manning became a franchisee in the Denver area for Papa John's, and also purchased 21 franchises in the area.[17]

In July 2013, Papa John's announced it had became the Official Pizza Partner of The Football League in the UK.[18]

Controversy[edit]

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 Internet[19] to Cleveland television. Increasing awareness of the controversy prompted an apology from the Papa John's national headquarters on May 5.[20] 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.[21]

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.[22] The employee was fired and the company issued a formal apology.[23] A 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."[24]

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.[25]

UK franchise[edit]

Papa John's has operated in the United Kingdom since 2001. In April 2014 the company had 250 shops in the UK[26] with plans for between 400 and 500 within 5 years.[27]

Cyprus franchise[edit]

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

Portugal franchise[edit]

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.[28]

Irish franchise[edit]

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.[29]

See also[edit]

References[edit]

  1. ^ "Papa John's International Annual Report 2012". Papa John's International, Inc. Retrieved 2 August 2013. 
  2. ^ a b c d e f PAPA JOHN'S INTERNATIONAL, INC. Form 10-K, Securities and Exchange Commission, February 25, 2014
  3. ^ a b "Little Caesars rises to nation's No. 3 pizza chain with $2.9B in sales". Detroit Free Press. Retrieved 2013-08-19. 
  4. ^ "Jeffersontown to dedicate new bike and walking path Saturday." The Courier-Journal. November 7, 2007. C7. Retrieved on December 6, 2012. "Papa John's office is in Jeffersontown,"
  5. ^ "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."
  6. ^ "2010 CENSUS – CENSUS BLOCK MAP (INDEX): Jeffersontown city, KY 1." U.S. Census Bureau. Retrieved on December 7, 2012.
  7. ^ "Papa John's Celebrates Opening of 4,000th Restaurant Worldwide". Retrieved 16 September 2012. 
  8. ^ a b "The Papa John's Story". Papa John's (GB) Ltd. Retrieved 2 August 2013. 
  9. ^ "Entrepreneur.com – Franchise Information". Retrieved 16 September 2012. 
  10. ^ [1]
  11. ^ [2]
  12. ^ Pizza Hut, Inc. v. Papa John's Int'l, Inc., 227 F.3d 489, 495 (5th Cir. 2000).
  13. ^ http://www.topclassactions.com/lawsuit-settlements/lawsuit-news/4146-papa-john-s-agrees-to-16-5m-text-spam-class-action-settlement
  14. ^ U.S. Franchising Opportunities – Requirements & Fees – Papa John's Pizza
  15. ^ "USA: Papa John's first pizza chain to offer nationwide online ordering". Retrieved 2007-02-18. 
  16. ^ "Domino's Prepares to Go Public as Pizza Chains Are Challenged". 
  17. ^ "Broncos' Peyton Manning to Own 21 Papa John's Pizza Franchises". 2012-10-27. Retrieved 2012-10-29. 
  18. ^ "Papa John's announces Football League sponsorship". The Football League. 15 July 2013. Retrieved 2 August 2013. 
  19. ^ Sogoodblog.com, May 3, 2008.
  20. ^ Eick, Jon. How Papa John's averted a WOM disaster, iMedia Connection, May 28, 2008.
  21. ^ Papa John's Serves up 23 Cent Pizzas
  22. ^ Mandell, Nina (January 7, 2012). "Papa John's customer: Pizza joint called me 'lady chinky eyes'". Daily News. 
  23. ^ Papa John's employee fired for racial slur on receipt from Yahoo 10 January 2012
  24. ^ "Papa John's Fires Employee For Using Racial Slur To ID Korean Woman On Receipt". 
  25. ^ Tau, Byron (August 7, 2012). "Papa John's: 'Obamacare' will raise pizza prices". Politico. Retrieved 14 August 2012. 
  26. ^ "Papa John's: The franchise opportunity". Startups.co.uk. Retrieved 2014-05-06. 
  27. ^ Wilson, Amy (2010-08-29). "Papa-Johns after slice of Domino's pizza action.". The Telegraph. Retrieved 2011-04-05. 
  28. ^ DRE.pt
  29. ^ http://supermacs.ie

External links[edit]