Friday, August 10, 2018

Dueling Ego’s Threaten Papa John’s Franchisees Future

Success does leave clues and clue one is corporate conflict and infighting amid a public relations nightmare should be avoided at all cost according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.
Papa John’s franchisees are now and will be paying the price, footing the bill, and capitulating retail momentum the longer John Schnatter Papa John’s founder and largest shareholder and current management egos continue the battle of who should be running the company.
Last week during the earnings call Schnatter was not on the call after he tendered his resignation from the board; befuddling all he then sent out a statement on the company’s performance, laying the blame squarely with the Papa John’s current management.
Now remember that’s the same management that he hired, worked with and praised.  If this sounds like political infighting; it is! By the way that is a bad thing for the company, worst for the franchisee.  Lawyers and the news media will fare better than franchisee’s the longer this conflict continues according to Johnson.  The side are being drawn you have Jim Cramer saying to investors buy Dominos’ Pizza over Papa John’s.
You have University of Louisville taking Papa John’s name off its football stadium. All the while Ball State after seeing a large response after Papa John's decision to remove Schnatter the Trustees at Ball State decided to support the pizza-chain founder, who graduated from the university in 1983
The fact is Papa John’s has maintained a ‘pizza’ sector status quo positioning for too long according to Johnson. Schnatter and his team the current management followed the time tested rule for public companies ‘do no harm’.  When you maintain the status quo at all cost and are not proactive within the retail sector, there is a big price to pay when mistakes come along. 
That price is being paid by the franchisees.  A new marketing / advertising company will create a new message that can deflect from the noise of the internal squabble.  However it will not be enough to drive long term sales and bottom line profits for franchisees.
Domino’s without conflict completed changed their core product taste, look, and texture then revised its menu and now is leading the pizza sector in success.  Marketing messaging is not enough to save Papa John’s franchisee from closing units, capitulating market share and profits. Whoever is going to lead Papa John’s in 2019 has to step-up, and step-away from the status quo.  
If success does leave clues Papa John’s franchisees must get current management and Schnatter on the same page focusing on the consumers need-set not their egos in the mind-eye of Johnson.  
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