The Exorcism of Papa John’s

For a business about making and selling pizzas, Papa John's has gone through non-stop drama, infighting, and controversy in recent years. While every company has its problems, Papa John’s takes the cake with the founder trashing his own company in public. But when a founder says a racial remark in a recorded business meeting, it’s an offense so great that no company could sweep under the rug.

Companies rarely go to war against their own founders. But the timing, evidence, and volume of media covering John’s misconduct was so sudden, strong, and overwhelming that it was no coincidence. The Board wanted to bury John. It would not be enough to exile the founder and former CEO. John was an evil spirit and what Papa John’s needed as a company was an exorcism.

Since his removal in 2018, John has climbed out of the dirt and gone on a high-profile, mud-slinging, counter-offensive rarely seen in usually tight-lipped corporate America. Was John Schnatter actually a good CEO or was he an egotistical founder holding his own company back? How could a pizza company have so much drama? Was John the victim of a scheme by his former best friend? What were the strategies before and after John - and how is Papa John doing now without him? In this episode and business case study, we’ll cover the exorcism of Papa John’s in its 6 regimes.

0:00 Better Ingredients, Better Pizza
4:57 Sponsor Break (Factor Meals)
7:49 Rise of John Schnatter
21:54 The Invincible Reign
32:30 Overthrow of a Dynasty
43:30 Sponsor Break (MooMoo)

[ModernMBA]

Correction: The graph at 1:54 is incorrect. We mistakenly graphed Pizza Hut's system sales alongside company revenue for Domino's and Papa John's, which skews the graph to an unrealistic extreme.

0:00 Better Ingredients, Better Pizza
11:12 Rise of John Schnatter
21:54 An Invincible Reign
32:30 Overthrow of the Papa Dynasty

[Tuberuser]

How the hell was Laundry Service threatening to leak those tapes to try and force a dispute settlement not considered blackmail?

[flyingdaytrader]

Wow... I had no idea that they did John so dirty. I mean this is a hit job like no other. They didn't like him and just created a bunch of fake controversy to destroy him

[Max-vetu]

I hope no company ever works with that ad agency again. How can you trust a slimey company like that?

[baylenlucas]

Meanwhile at Little Caesars:
"Maybe we should cut costs and lower prices"
"Literally how?"

[edvaira]

I worked for sixteen years as a driver at one of the busier Papa Johns in suburban San Diego (we were the store closest to the Miramar Naval/Marine Corps Base with about 25000 hungry military personnel) and watched as the quality of our products steadily deteriorated (we went from freshly cut vegetables, which I would personally have to prep daily to canned, and from premium brands of meats and cheeses to far cheaper quality products) and the care taken with our products plummeted….it was depressing

[electrified]

Celebrity CEOs are difficult enough to separate from their business when it's not named after them. That's how you end up with headlines like "Papa John sues Papa John's".

[blueguy]

As insufferable as his personality can be, it's admirable the pride John has in his product.

[GyroCannon]

I only knew about Papa John through what went through the media, so I'm shocked that i feel bad for the guy after watching
He does sound a bit egotistical with how he handled Nigel, but his ousting during his second tenure and forced stepping down from his chair position were definitely undeserved. The media defintely screwed him over.

[sageviper]

Ngl the name Laundry Service should’ve been the first sign that something wasn’t right

[planecrashcorner]

I would LOVE to take a deeper look on the Starboard takeover of Olive Garden; sounds intriguing

[Survivalcraz]

Honestly feel bad for John, that was disgraceful from the ad agency.

[gotseoul]

25:00 John in his final form 😂😂😂😂😂

Modern MBA makes some of the best content to me on YouTube.

You've been on a tear lately keep up the good work my man.

[kelinator]

I feel bad for Nigel. Did his job well, didn't cut corners, and took Papa John's further but got betrayed by John for basically no good reason

[David-nxvm]

Using celebrity spokespersons or making your CEO a celebrity is always risky. Celebrities can and often do discredit themselves — look at Jared from Subway and Gilbert Gottfried from AFLAC. The skills that make a successful CEO generally do not translate to celebrity. There are exceptions — Lee Iacocca did a great job as Chrysler’s front man in the 1980s while serving as CEO. But the few exceptions prove the rule. Rising to the top of your profession is like winning the lottery in that in both cases, people become more of what they already were.

[JK]

I hope papa wins the lawsuit. Laundry service did him so dirty

[lukamagicc]

Shoutout to Jason Stein for his comments getting leaked on a large call by his own colleagues not muting their mic. This is A+++ drama and its so fucking entertaining. Wow this might be the best Modern MBA video I've seen.

[prada]

Your channel is a favourite of mine, it's rare that information and facts are presented in such a coherent way. Appreciate the work that you're doing - best of luck and hope for many more!

[elizamartin]

This is such a saga. You do an amazing job telling stories in a compelling, efficient and detailed way!

[zeroconsequences]

What Papa Johns did to John was unforgiveable. I kind of liked ordering from there but when I heard they fired him I stopped and haven't been back since. I'd rather eat shoe leather.

John was on a podcast talking about cultural issues and was not calling anyone the n-word, but using it to describe racism, and for this they crucified him. And, as the video shows, it proves John right to have taken extra measures in the company to monitor their behavior since the board leaked private information about him and used the scandal to fire him. The whole thing was a shitshow. But I guess this is just another reason not to sell your company and stay with it, or to ever go public with a company you still care about.