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The Recipe Behind the Papa John’s Scandal

Alex Constantine - December 1, 2012

By Ebony Grimsley (excerpt)

NewsOne for Black America, November 16, 2012

John Schnatter, CEO of Papa John’s, first came under attack after his address to shareholders in August. What wasn’t meant to be a public declaration of being against the Affordable Healthcare Act as introduced under the administration of President Barack Obama, turned into a discussion gaining a lot of confusion and animosity towards the pizza chain. John proclaimed in August that, “We’re not supportive of Obamacare, like most businesses in our industry. But our business model and unit economics are about as ideal as you can get for a food company to absorb Obamacare.” The Politico article containing words from the call went on to include the company would use tactics to protect its shareholders. In the same call John went on to say, “Our best estimate is that the Obamacare will cost 11 to 14 cents per pizza, or 15 to 20 cents per order from a corporate basis.”

Now for the general public who sees that Schnatter was a huge donor and supporter of the Republican Presidential Candidate, Governor Mitt Romney, they can equate the use of his term of Obamacare and his personal support to mean an attack on policies and lack of consideration to employees. However, I do not believe this is where John went wrong. Stick with me, I’ll show you where his words started to bite him.

After the shareholders meeting, Papa John’s announced its NFL promotion to giveaway 2 million pizzas.

•    Schnatter says that franchises will more than likely reduce employee hours. This news reignited the public spurring a boycott of Papa John’s.

I do not believe that it is the concern of people who support the healthcare act or not, that is really driving the criticism, it’s the simple math of it all. ... Instead of clarifying the company’s position, he left individuals to ask the question, ”why raise the rates and give away pizzas if you still intend to not provide healthcare to your employees and reduce their income?” ...

What really draws my interest as a media professional to his original statement to the shareholders, is that if he had used words to not draw an emotional response to government policy, increasing the price of the pizza would have been forgotten after it was implemented. ...

John Schnatter really has only one thing left to do at this point in his crisis, slice up and eat some humble pie. Here is what I recommend:

•    John needs to make one final and clarifying statement on the topic of how his company will handle healthcare as it concerns his employees.

•    His final statement should be either pro-customer or pro-employee. If he has paid attention to the comments, he would realize that none have been highlighted as saying, the public will not pay the extra cents so others can have health insurance. Either way, he needs to make one final statement and stop discussing it from various angles. The inconsistency is not sitting well with customers.

•    The company needs to focus on publicly highlighting their mission to their employees and to the customers. Ensuring to the public, a business that started off small, can still relate to the working class (his demographic).

•    Until this is completed, the emphasis on giving away 2 million pizzas needs to simmer in the oven before serving it back to the public. (Pun intended.)

•    This should all be done before the boycott gets legs and runs away too far for him to fix.

What do you think? How has the Papa John’s discussion played out among your family members, friends or business associates? Above all, please walk away with this reminder to not incorporate political emotions into your company’s public stance.


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