The fallout: Papa John's losing business even after chairman steps down Skip to main content

The fallout: Papa John's losing business even after chairman steps down

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ATLANTA -- The fallout continues for Papa John's Pizza.
After founder John Schnatter resigned this week as chairman, others are still cutting ties with the company.Dozens of sports teams and business have reported that they will no longer partner with the pizza chain.
In Atlanta, AMB Sports and Entertainment is suspending its affiliation with Papa John's. AMB Sports and Entertainment is comprised of the Atlanta Falcons, Atlanta United, and a few other entities. The leadership team met Thursday and made the decision.
Schnatter resigned late Wednesday night, the day after he apologized and admitted to using a racial slur on a May conference call. AMB Sports and Entertainment released the following statement:
"Effective today, AMB Sports & Entertainment has indefinitely suspended its affiliation with Papa John's. The divisive comments made and acknowledged by the company's founder are reprehensible and do not align with our core values. While we have enjoyed a positive relationship with the local franchisee and staff, we will be evaluating the overall relationship between Papa John's and our sports properties over the coming weeks.
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Morehouse College tweeted that it would be suspending its campus dining relationship with Papa John's.
RELATED | FORBES: Schnatter, former Papa John's CEO, apologizes after racial comment during call
Schnatter reportedly used the N-word on a call with a public relations firm that was designed to help the company avoid more public relations issues.
At one point, Papa Johns was the third largest take-out pizza and delivery restaurant in the U.S., according to PMQ Pizza Magazine in 2016.
However, in the last few years, the pizza giant has been in the spotlight for other reasons.
The company said it plans to pull founder John Schnatter's image from marketing materials.
11Alive went to one of the metro locations Friday afternoon and saw that his image was still there.
Here's a breakdown of some of the issues that have plagued the company for the past six years.
2012

  • Papa's Johns was sued for allegedly sending over 500,000 unwanted text messages to customers. The company settled to pay $16.5 million, awarding members of the class-action lawsuit up to $50 in damages and a free pizza.
  • Schnatter is accused of making critical comments about the Affordable Car Act to a class on entrepreneurship. In a shareholder conference calls, Schnatter says he oppose the ACA because "Obamacare will cost 11 to 14 cents per pizza." Schnatter says he will pay the costs onto the consumer.

  • 2015

  • Papa John's settles class-action lawsuit for $12.3 million. The lawsuit, originally filed in 2009, sought damages against the company for allegedly under compensating 19,000 delivery drivers in the U.S. The suit said the company did "willfully fail to pay the federal minimum wage to their drivers."

  • 2016

  • Panera Bread sues the company, accusing Papa John's of stealing digital trade secrets by hiring a former Panera executive, Michael Nettles. A judge later issued a restraining order, preventing Nettles from working with the company. Panera later dropped the suit.

  • 2017

  • Schnatter blames the NFL for poor financial performance, saying "The NFL hurt us. We are disappointed the NFL and its leadership did not resolve this," referring to NFL players kneeling during the National Anthem. Papa John's served as the official pizza sponsor of the NFL since 2010. The same day the comment was made by Schnatter, Papa John's announced the NFL sponsorship was removed.
  • Schnatter is replaced as CEO effective Jan. 1, 2018 by COO Steve Richie. Schnatter still appears in the chain's commercials and on pizza boxes and remained on executive board as well as the largest company shareholder.

  • 2018

  • Various news agencies report Schnatter said the N-word during a conference call with marketing agency, Laundry Services. Schnatter resigned from the board the same day and later stepped down from his position on the University of Louisville board of trustees.
  • Several sports teams suspends its affiliation with Papa John's. Papa John's announces it will remove Schnatter's images from ads, and the University of Louisville announces they will remove Papa John's name from football stadium, business school and phone contacts.

  • OTHER |
    © 2018 WXIA

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