Papa John’s founder John Schnatter unloaded more than a third of his stock in the pizza chain valued at $107.5 million, according to a securities filing, and has insisted that company under its current management cannot survive without him.
Despite dumping the 1.9 million shares, according to a Form 4 filing with the Securities and Exchange Commission on Tuesday, Schnatter still held on to a 9.2 stake in the business valued at $166 million.
Holding on to his 2.9 million remaining shares, Schnatter has quipped that the nation’s third largest pizza franchise chain is on a fast-track to failure, because he had done a better job of running the business.
Papa John’s founder John Schnatter (pictured) unloaded more than a third of his stock in the pizza chain valued at $107.5 million, according to a securities filing made Tuesday
Papa John’s founder John Schnatter says the nation’s third largest pizza franchise chain is doomed to fail because he had done a better job of running the business
‘I feel there’s no reason to be in the car when the car crashes, even of you love the car,’ Schnatter told Maria Bartiromo in a telephone interview broadcast on FOXBusiness on Wednesday, explaining why he dumped his stock.
‘Said in other ways, Maria, arithmetic is not an opinion. Why would you or I, or anybody, want to own so many shares of a company that’s going backwards,’ he further explains of the November 1 stock sale.
Schnatter charges that ‘Papa John’s has strayed from its ‘principals’.
‘If you don’t have your principals, you have nothing,’ he told Bartiromo. ‘Papa John’s has abandoned the fundamental principles of transparency, integrity, mutual respect, quality measuring, loyalty, loyalty to the franchisees, loyalty to the suppliers… Everybody has to win’.
Papa John’s announced on Wednesday a loss of 10 cents per diluted share in the third quarter, missing the 3-cent loss analysts surveyed by Refinitiv were expecting, reports FOXBusiness.
The company also said Chief Financial Officer Joe Smith was leaving, along with other executives. Smith had been at the company for almost 20 years.
Schnatter said Papa John’s was having a knee-jerk reaction, and recommended management take more proactive action.
Schnatter has noted Papa John’s, which he founded in 1984 out of a broom closet in his father’s tavern, Mick’s Lounge, in Jeffersonville, Indiana, has struggled since he resigned his post as head of the pizza franchise empire.
Papa John’s shares dropped 3.6 per cent after Schnatter stepped down as CEO in December 2017, and had sunk as much as 34 per cent before rallying, reports FOXBusiness.
The former chief executive left the company after drawing criticism for blaming disappointing sales on the NFL’s handling of player protests during the national anthem.
Six months later, reports emerged that the founder had used the ‘n-word’ during a media training call about avoiding PR blunders.
John Schnatter (center) founded Papa John’s in 1984 out of a broom closet in his father’s tavern, Mick’s Lounge, in Jeffersonville, Indiana. He complains the chain has struggled since he resigned his post as head of the pizza franchise empire
During the call with media agency Laundry Service, Schnatter tried to downplay his NFL remarks, saying ‘Colonel Sanders called blacks n*****s’ as he complained that the KFC founder never faced public backlash.
He resigned as board chairman soon after those reports came out and subsequently went through a public fightback, where he sued the company and hired a public relations team to launch a website to tell his side of the story.
In a piece for the New York Post before the third quarter results were announced, he claimed that in August 2018, ‘I tried warning my fellow directors and put out a news release that the performance of the company was bound to get worse. My prediction has been proved right for four quarters since then and still today.
‘More important,’ he adds, ‘what I’ve observed in the months since then is that the Papa John’s management may be emphasizing cost-cutting over product quality. Even the pizzas don’t appear to be made the way that I made them just a few years ago’.
‘Leadership’ Shnatter says, ‘means taking responsibility for the command of your ship and not using scapegoats’.
He urged the company’s management team ‘to step up and change course — immediately — to revive our iconic American brand. I should know, since my team and I built more than 5,000 stores from scratch and brought us through other down cycles’.
But for now, Schnatter tells FOXBusiness that he has no plans to take the company over at its current price, especially when he believes it’s ‘potentially a $15 stock’.
Papa John’s stock was at $60.18 during mid-day trading, up $2.99, or 5.23 percent.
Papa John’s stock (pictured) was at $60.18 during mid-day trading on Wednesday, up $2.99, or 5.23 percent. The chain’s founder John Schnatter says he has no plans to take the company over at its current price, especially when he believes it’s ‘potentially a $15 stock’