A History Of Growing Trust In Kentucky

Papa John’s struggles to find a buyer amid controversy

On Behalf of | Dec 6, 2018 | business formation & planning

When the person who’s the name and face of a Louisville-based company speaks out in ways that many people find offensive, that company can suffer potentially irreversible damage. In recent years, Papa John’s has become known more for the words and actions of its chief executive officer and founder John Schnatter than for its pizza.

Back in 2012, Schnatter said that would need to raise the price of pizza to cover what he said would be the added costs to the company of the Affordable Care Act. Things have only gotten worse for the company and its outspoken leader.

Earlier this year, Schnatter weighed in on the controversy over NFL players kneeling during the national anthem, claiming that fans’ negative response was hurting his pizza sales. The last straw seems to have been this summer when Schnatter reportedly used a racial slur during a conference call in comparing himself to Colonel Sanders of fried chicken fame, whom he asserted had used the slur without repercussions.

Soon after that, Schnatter resigned from his position as chairman of the board. Then, upon further reflection, he went to court in an unsuccessful effort to get it back.

All of this controversy and uncertainty has hurt the company and its franchises so much that the company began offering them financial help to stay afloat. Some franchisees are reportedly considering legal action.

The search for a new owner to rescue the beleaguered company hasn’t been going well. When one potential buyer recently pulled out of the running, the company’s stock continued its fall.

While most Louisville companies don’t have to contend with the problems that have faced Papa John’s recently, finding a buyer can be a long, complicated process. It’s wise to have the guidance of an experienced business law attorney.