Break in Papa John: The founder sued the company and disqualified his successor

The fact that a company uses its charismatic founder as an image makes sense: this can help create a captivating and appealing story for staff and customers alike. But this can also be risky, especially if the character has a strong control of business decisions and there is no one to inspect it.

A repertoire unable to say no and a leader who easily loses contact are the perfect ingredients for problems. Shortcomings in strategic decision-making or behavior that Angers employees and investors leave the table have served for the chaos reign in the business.

This is precisely what happened inside Papa John's, the American pizza chain. who saw how the comments of her CEO ended up pushing her to the edge of the cliff.

Imprudent Opinions

John Schnatter founded the Kentucky-based company in 1984 at the back of his father's tavern and from there he became the third largest pizza delivery group in Canada. world.

Advertising campaigns focused on his extroverted personality and even his face became part of the logo. But that posed only problems later.

Each of his interventions was obviously linked to the company and his opposition to a protest by American football players eventually weighed on the shares.

The CEO criticizes the demonstration of African-American players during the intonation of the United States national anthem, because in their opinion this would alienate the public. As a sponsor of the league, he feared that the protest would alienate viewers, and less the public, less exposure of his brand.

His words frightened investors and customers who supported the right of players to express their opinion. In one week

The company eventually took away the founder of the executive director position in December, but he maintained it as spokesperson and chairman.

However, the disadvantages did not stay there. Earlier this month, Forbes revealed that Schnatter made racist comments during a training exercise designed specifically to prevent public relations crises.

His apology and four baseball teams – like the New York Yankees – and the University of Louisville cut ties with the company. After that, Papa John did not hesitate. Schnatter resigned as president, his office was evicted and plans were announced to remove his face from the logo.

A "blow" negligent

For Schnatter, the decision was a "coup" by a company "negligent", which he responded with a request allowing him to have access to documents relating to his dismissal .

But, furthermore, he castigated his successor – Steve Ritchie – who, according to him, "is not qualified" to run the company. "I would be a great leader for another company, I do not think it's right for Papa John right now," he said.

Schnatter is still the controlling shareholder with 30% of the titles and says that during this time he will do everything to continue in the directive

Losing the War

This controversy is only a point of more against a company that still has to deal with a terrible fall in revenues.

After years of expansion, the increase in sales began to slow down and Papa John began to lose the war against Pizza Hut and Domino's.

At the beginning of this decade, the chain gained more market share than its rivals, but for a few years it began to lose ground. price difference. Pizza Hut is now offering more attractive promotions and Domino, an industry leader, has been doing this for years.

Papa John 's reported late last year that same store sales increased by only 1%, a net slowdown over the previous year. previous year. Between January and March 2018, the same sales in North America decreased by 5.3%.

Other Cases

Papa John's is not the only one to have a problem with his eccentric founder.

American Apparel tolerated controversy for years before dismissing its founder in June 2014. Meanwhile, the Uber Board of Directors agonized last year for the role of its creator and investor, Travis Kalanick. toxic business After his resignation, the new CEO, Dara Khosrowshahi, has risen to change the course.