Papa John's founder John Schnatter has filed a lawsuit asking the company's board to provide documents surrounding his departure. / Bloomberg Papa John's founder John Schnatter has filed a lawsuit asking the company's board to provide documents surrounding his departure. / Bloomberg

Ousted as Chairman, Papa John’s Founder Refuses to Go Quietly

Papa John’s International Inc. founder John Schnatter is mounting a campaign for new leadership at the company, including the chief executive officer and members of the board, firing back after he was ostracized for his use of offensive language.

Schnatter, who resigned as chairman but remains on the board, owns 29 percent of the company’s stock and is planning to speak with other shareholders about installing new leadership at the company in an effort to fix the struggling pizza chain, he told Bloomberg News. He also has appealed to a Delaware court to force the company to provide documents related to his departure.

“The shareholders are going to dictate the board, and I think we have to take a hard look at this board and if the composition of this board is the best thing for Papa John’s,” Schnatter said in a phone interview. “I would suggest we start looking for new leadership immediately.”

Schnatter’s move to reassert his influence follows the board’s steps to distance itself from the founder in recent weeks. This has included removing him as the brand’s spokesman and adopting a so-called poison pill aimed at preventing him from gaining control of the company.

Schnatter said he is not interested in returning as CEO, but wants to have a role in plotting a comeback for the chain, which has reported slumping sales in addition to the public-relations controversies.

“I’m the best bet they’ve got,” Schnatter said. “My guidance on how to get this back on track could play a valuable part in making this thing healthy again.”

The company didn’t immediately respond to a request to comment. The board was scheduled to meet on Thursday.

Schnatter, 56, stepped down as chairman at the request of the board on July 11 after a Forbes report that he used a racial slur and graphic descriptions of violence against minorities in a conversation with the company’s former media agency, Laundry Service. Schnatter admitted to using the slur but said he was taken out of context.

That was just months after he exited the CEO job over critical comments about the National Football League’s national-anthem controversy. Following those remarks, Schnatter abruptly stepped down as CEO in December, passing the reins to deputy Steve Ritchie, who has been with the company for decades.

Schnatter said he has been unhappy with Ritchie’s leadership, and particularly his response to both the NFL situation and the recent controversy.

Papa John’s shares fell 0.4 percent to $44.49 at 2:26 p.m. in New York. The stock has declined about 21 percent this year.


–With assistance from Jef Feeley and Leslie Patton.


©2018 Bloomberg L.P.


This article was written by Craig Giammona from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].

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