Papa John’s slams its founder in open letter | Public Relation

Papa John’s is looking for distance from founder John Schnatter—and is
doing so in a highly public way.

The controversial principal stakeholder and former CEO made headlines when
he blamed poor sales on NFL protests against police-violence during thenational anthem—and when
it was leaked he had used the n-word.

He was forced to resign, and now the company he built into a national chain
is trying to move on. However, Schnatter has been fighting his ouster.


As PR Daily previously reported:

Papa John’s also has to contend with Schnatter, who
recently published a website and accompanying ads
taking on the company’s leaders. He also lashed out at the chain’s recent
apology.

CNBC reported:

Schnatter’s spokesman Terry Fahn said the ad was misleading.

“The video produced by the company represents another example of the
company attempting to hide the true facts,” said Fahn, a strategic
communications and crisis management executive for Sitrick. “It omits the
avalanche of comments made by customers, employees and others who support
John Schnatter and feel that the company is wrong.”

Fahn said Schnatter supports diversity, equity and inclusion within Papa
John’s but remains concerned that the company is acting “improperly.”

Now the board of directors is attacking Schnatter in unvarnished language.

In an open letter, the board wrote:

John Schnatter is promoting his self-interest at the expense of all others
in an attempt to regain control. John Schnatter is harming the Company, not
helping it, as evidenced by the negative impact his comments and actions
have had on our business and that of our franchisees. We have tried to meet
directly with John Schnatter to discuss how we can move forward in the best
interest of all stakeholders. However, John Schnatter had not responded to
our requests until last week when his attorney conveyed his conditions for
a meeting, stating John Schnatter would agree to meet only if we cancelled
the annual Operators Conference (OpCon) and allowed John Schnatter alone to
reschedule it to a date, time and location of his choosing. OpCon, which is
being held this week, is a critical annual meeting that brings together
approximately 1,500 team members and franchisees from all around the world.
John Schnatter’s demand that it be cancelled just one week in advance was
unreasonable and does not support his purported concern for the future
success of Papa John’s franchisees, employees and team members.

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The board is preparing for Schnatter to attempt a hostile bid to retake the
company.


USA Today
wrote:

Throwing down a gauntlet to Schnatter, [the board] said “we will defend the
company against his actions and continue to do what is right for Papa
John’s and our stakeholders.”

The board members said they have received “outspoken support from
customers, employees, franchisees, partners and shareholders for the
actions we are taking.”

The company last week hired two investment banking firms, which experts
said may signal it expects Schnatter to make a hostile bid to buy the
company outright.

Schnatter, who founded Papa John’s in 1984, owns 31 percent of its shares,
a stake that is worth about $400 million.

Schnatter declined to respond to reporting about the open letter, in which
the board laid out specific grievances with Schnatter, detailing his
ignoring its advice and behaviors that led to several PR crises.

It listed:

  • The Board specifically directed John Schnatter not to talk about the NFL
    controversy related to the National Anthem on the 2017 third quarter
    earnings call. In direct defiance of these instructions, John Schnatter
    made unscripted comments about the NFL controversy.
  • When independent market research showed that a change in spokesperson and
    advertising strategy was warranted, John Schnatter commissioned his own
    research and produced separate commercials that starred himself.
  • It is simply not true that the Board asked John Schnatter to become
    Executive Chairman, as he has recently asserted. Rather, John Schnatter
    suggested to individual Board members that he should become Executive
    Chairman and even directed a member of management to make unauthorized
    contact with the Compensation Committee’s independent consultant in July
    2018 to ask for peer compensation data.
  • John Schnatter misinformed the Board about the circumstances surrounding
    the termination of the Company’s relationship with Laundry Service.

On Twitter, some have remarked on the tone of the letter as well as the
content:

The letter from the independent directors comes after Schnatter accused the
current Papa John’s CEO and his team of misconduct.

Reuters reported:

Papa John’s International Inc (PZZA.O) founder John Schnatter, who is trying to regain control of the pizza
chain after resigning as chairman in July, accused Chief Executive Officer
Steve Ritchie’s “inner circle” of sexual misconduct, an allegation the
company denied on Tuesday.

[…] “The company’s HR department has detailed evidence of sexual
misconduct, harassment and intimidation by virtually everyone in Steve’s
inner circle, and relating to board members as well,” Schnatter’s letter
said.

What do you think of the high-profile nature of these moves and
counter-moves, PR Daily readers?

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