John Schnatter started Papa John’s Pizza in the broom closet of a non-descript tavern 27 years ago. But en route to growing that concept to 4,000 stores in 48 countries, the driven CEO has admittedly hit some rough spots, challenges he overcame and has learned from.
The publicly held company is on a roll with its stock price hovering near an all-time high of $52 a share. Papa John’s is the world’s third-largest pizza chain and at 50, Schnatter is as engaged as ever at the helm of the firm.
“I’ve learned some lessons for sure,” said Schnatter. “But that’s what life is about. You’re challenged and you overcome.”
In 1993, just eight years after founding his company, it went public with 600 stores. The Jeffersonville, Ind., native, a man of humble means, was wealthy and the talk of the restaurant industry.
But with the growth accelerator to the floor, the wheels threatened to come off at Papa John’s in 2000. Schnatter admits “we outgrew ourselves and lost track of the fundamentals.” Nearly as fast as Papa John’s stores were opening, others were closing. While those deals done with well-heeled franchisees, those same people lacked operations skills.
“We’d picked partners who wanted to make money, but they had no controls in place,” Schnatter said. “It was a hard lesson to learn.”
As the company’s chairman, Schnatter returned to the CEO’s chair to take over daily operations. At the same time, he consulted some of his closest industry peers for help. Dino Cortopasi, then CEO of Stanislaus, a commercial tomato products manufacturer, “helped me get back to basics and focus on quality,” Schnatter said. “Quality always wins, he told me, so stick with it. He also said that what gets measured gets done, and from that point on, we’ve measured everything we do at Papa John’s. We’re rigorous about that.”
The company rebounded nicely, and Schnatter would again step back to his chairman’s role and brand spokesmen. However, the hiring of two CEOs in the next four years would turn out to be enough rotation in the top office for Schnatter. He’s since become convinced he’s the best fit for that spot.
“If I do step back from the business, it does go down,” he said, while admitting some shortcomings in those leadership choices. Should he ever hire another CEO, something not likely given his age, he said it’ll be someone with a lot of experience within the company. “You learn from your mistakes. What can I say?”
Though he doesn’t spin the skins in pizza stores anymore, his work schedule is still seven days a week. His duties as the head of a public company consume his hours, as does his desire to see Papa John’s expand internationally. When he does manage to squeeze in golf games, he’s as competitive on the course as he is in business, said Terry Meiners, a longtime friend.
“That intensity never shuts off,” said Meiners, a prominent radio personality in Louisville, Ky., where Papa John’s sprawling headquarters is based. Internationally the company employs 80,000 people. “He loves to cut up, and his dry sense of humor is very funny. But John’s always on. I don’t know where he gets the energy for that. I admire that about him.”
Schnatter’s younger brother, Chuck, said John’s drive is born of an interest in one thing: pizza.
“That’s his passion, the product: pizza. It’s all he thinks about,” said Chuck Schnatter, who helped his brother build the company, and left the firm in 2008 as a vice president. “He’s good at what he does because his standards are high. He knows that’s what gives Papa John’s its edge.”
John Schnatter credits his parents and grandparents for his drive, saying they taught him and his brother the value of hard work at a very young age.
“We did work hard growing up, but there were always rewards for that, and I liked that,” Schnatter said. “I work every day because I want to, because I like to.”