How ‘Papa John’s’ Founder Became Worth Millions, Lost It

John Schnatter, founder of Papa John’s pizza franchise, from a small town in Indiana, never imagined he’d be a billionaire.

The Dough Rises

After graduating from Ball State University in Muncie, Indiana, Schnatter went back home to Jeffersonville to help in his father’s local tavern, Mick’s Lounge. To do so, Schnatter sold his 1972 Camaro Z28 when the tavern began struggling financially and once his father’s business was out of the red, John tried his hand at his own business.

According to Entrepreneur, the young businessman bought $1,600 worth of used restaurant equipment in 1984 and began making pizzas out of a renovated broom closet in the tavern.

As a teen, he had learned the business of making pizzas from working at another local eatery and noticed a gap in the market – the higher quality pizzas came from the locally owned businesses, and they didn’t deliver.

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By his early 20s, Schnatter opened his first store front location in Jeffersonville and was doing $9,000 in weekly sales, beating the other national pizza chains. He once said his entire goal was to make $50,000 a year so he could get a date.

Today, there are approximately 4,500 Papa John’s locations, 700 of them owned by the corporation and the rest operating independently. As of 2017, his net worth was more than $1 billion.

As the rise of Papa John’s popularity grew, the sports fan became involved with several sponsorships, including the NFL.

He hasn’t forgotten where it all started.

Schnatter later hunted down the very same Camaro he had sold in the early 80’s to help his father’s business and purchased it for $250,000 as a reminder of his journey and how hard work pays off.

The Dough Falls

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Unfortunately, success has been followed by several years of turmoil for the founder and the third-largest pizza chain in the United States has suffered.

In 2018, Schnatter was accused of controversial and racist comments when he shared his thoughts on NFL players kneeling during the national anthem. He was later recorded using the n-word during a cooperate conference call.

He resigned but says he was forced from his CEO position with Papa John’s as the franchise struggled to rise above the rumors and reputation Schnatter was portraying.

By early 2018, Schnatter’s wife of more than 30 years filed for divorce calling the marriage “irretrievably broken”. They have two adult children.

In addition, many sports teams suspended or cancelled their affiliation with Papa John’s, including Major League Baseball (MLB), NFL, the New York Yankees and the University of Louisville changed the name of their football stadium from Papa John’s Cardinal Stadium to Cardinal Stadium.

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Schnatter’s hometown of Jeffersonville returned a $400,000 donation he had given for a new gymnasium. His face was removed from the now-famous Papa John’s commercials and logos though he has said he believes he could return as his persona “resonates with the consumer”.

Recently, Schnatter has made the news again for his response to the Papa John’s corporation and a complaint he filed stating the whole thing was planned to force him from his position.

He’s accused company leaders of “conspiring” against him and “painting” him as a racist according to Complex.

“They know he’s not a racist,” Schnatter said of himself in a recent One America News (OAN) interview. “I used to just lay in bed and go, ‘How did they do this?’ And we’ve had three goals for the last twenty months; get rid of this n-word in my vocabulary and dictionary and everything else because it’s just not true. Figure out how they did this and get on with my life.”

According to New York Post, Schnatter later responded to questions asking why it was difficult for him to get rid of the word from his vocabulary, in which he explained he was trying to say he wanted to get rid of the word in news media, “because it’s just not true”.

Rebuilding Reputations

Just last month, the U.S. District Court for the Western District of Kentucky unsealed a complaint filed by Schnatter alleging the company hired an ad firm to conspire against him. He also claims his use of the n-word was by way of criticizing another person for using it. He had “never used that word”, claiming his comments actually showed he was not racist if taken in full context.

According to the claim, a conversation was recorded after Schnatter had left the call and the ad service hired, deliberately made an attempt to “destroy [his] reputation”.

“It’s time for Laundry Service to be held accountable and for Papa John’s to correct the record and apologize to me for validating the media frenzy that led to my forced departure as the company Chairman,” Schnatter said is a statement.

This past winter, Papa John’s announced a new headquarters location in Atlanta, with plans to add 200 jobs to metro Atlanta and move most of their marketing, communications and human resources to the new facility, according to CBS News 46.

The move is expected to be official by summer of 2021. Other departments will remain in the original Louisville headquarters.

While the move is said to foster growth and the company’s desire to move forward, it’s also safe to say the company is doing everything they can to distance themselves from Schnatter and the controversy over the past several years.

Once calling himself, “the American dream” Schnatter has seen the rise and fall of his billion-dollar business plan and now watches from the sidelines as the corporation he built, moves on without him.

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Sources: Entrepreneur, Complex, New York Post, CBS News 46

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