The Lie That Destroyed Papa John's Pizza
Last year, John Schnatter was forced out of the company he founded following news reports that he used the N-word. On Tuesday, he condemned this ouster as based on a "farce" and blamed his successors at Papa John's for having "destroyed the company."
"Steve Ritchie, Olivia Kirtley, the board of directors all used the black community and race as a way to steal the company," Schnatter told WDRB News. "They stole the company, and now they've destroyed the company."
He predicted that "the day of reckoning will come."
The Papa John's founder said his successors have taken the heart and soul out of his company.
"They've hurt people that wake up every day and make this company great," he said. "I mean, it's a miserable place over there ... They're losing all of their good people. The key to this business is good people."
The product has gone downhill, too, he insisted: "I've had over 40 pizzas in the last 30 days, and it's not the same pizza. It's not the same product. It just doesn't taste as good."
"The way they're making the pizza is just not fundamental to what makes a Papa John's pizza," Schnatter lamented.
As for the two Papa John named, Ritchie was Schnatter's handpicked replacement, but the two are now estranged. Ritchie resigned as CEO last year. "Everybody knows, last year, that Steve Ritchie got $6 million plus $2.8 million to leave and be quiet, and (employees) got zero bonus," he said.
Kirtley is a current board member.
"Olivia Kirtley and Mark Shapiro should be in jail. It's that bad," Schnatter insisted. "What they've done is just wrong, and they've hurt a lot of people."
"I never dreamed that people that I cared about, that I loved, that I made multimillionaires, would do what they did," the founder added.
According to WDRB News, Schnatter said the May 2018 conference call that led to his ouster was "all made up." The news outlet did not directly quote him on this, and it seems what the founder really said was that the reports about his supposedly racist comments were "made up."
Schnatter admitted he had used the "N-word" during an internal conference call, but he said he used it in order to convey his hatred of racism. "This is all a farce," he said. "Nothing sells like the truth, and the truth, sooner or later, all comes out."
Indeed, the founder was forced out of his company after two statements falsely condemned as racist. In November 2017, he blamed the NFL players' kneeling protest for a drop in pizza sales. He suggested protesters drove fewer people to watch football, meaning fewer people ordered pizza for the big game.
Naturally, since Schnatter is a Republican and major conservative donor, his remarks were condemned as racist. In reality, it was an innocuous — and most likely false — claim. Even so, Papa Johns' stock dropped, and both the company and Schnatter issued apologies. Then Schnatter stepped down as CEO.
Then in May 2018, the founder used the N-word in a conference call between company executives and the marketing agency Laundry Service. The call "was designed as a role-playing exercise for Schnatter in an effort to prevent future public-relations snafus," Forbes reported. PR training is a common thing for CEOs and executives.
On the call, Schnatter was asked how he would distance himself from racist groups online. He downplayed the significance of his NFL statement, but then threw in some PR scandal history. "Colonel Sanders called blacks n-----s,” Schnatter said, before complaining that Sanders never faced public backlash.
Schnatter also reflected on his early life in Indiana, where he decried the racism he witnessed in his youth. He lamented that black people were dragged from trucks until they died. Although Forbes recorded these remarks as Schnatter attempting "to convey his antipathy to racism," the magazine did not explicitly quote his remarks. Most likely, Schnatter denounced this racism as evil. Even so, individuals on the call reportedly found the comments offensive.
Laundry Service did not try to help Schnatter polish this response, which it was hired to do. Instead, the company moved to terminate its contract with Papa John's. Then Schnatter apologized and stepped down as chairman of the board.
In other words, Schnatter was ousted over a questionable political statement and an off-color remark on an internal PR training call. He was indeed destroyed by a "farce."
If Schnatter is correct and Papa John's is headed to ruin, the pizza company was destroyed by a lie.
But why did the company leaders think they could oust the founder with so measly a weapon? Schnatter's stance as a conservative donor makes him an easy target in America's increasingly liberal corporate climate. When North Carolina took the basic step of protecting the privacy of women and girls by restricting public multiple-stall restrooms and locker rooms to members of the same sex, nearly 100 business leaders sent a letter threatening economic ruin over the bill.
When corporate America chooses a political slant, it makes this kind of ouster more likely. CEOs face a great deal of pressure. They are held accountable for the success or failure of a company — much of which is far outside of their hands. The social justice warrior cancel-culture only makes this worse, and empowers unscrupulous board members to force a visionary entrepreneur like Schnatter out of the company he founded.
Follow Tyler O'Neil, the author of this article, on Twitter at @Tyler2ONeil.