In the latest chapter of drama from Papa John’s International, Inc. (NASDAQ: PZZA), founder John Schnatter penned a poignant letter to franchisees regarding the state of the company. Schnatter made strong accusations regarding the company’s poor financial performance and senior leadership.
Schnatter describes in the letter his plans to remove the current CEO of Papa Johns, Steve Ritchie, from his position in light of this failing financial performance. However, he was beat to the punch. It seems that Ritchie was able to oust Schnatter in mid-July.
In order to combat this, Schnatter has created a website Save Papa Johns to hopefully retake his company. Currently Schnatter owns about 31% of Papa John’s, while he claims that the board and management all together own less than 2%.
Schnatter details in the letter:
The source of the company’s poor performance is rot at the top. 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. One of those directors, Mark Shapiro, who currently “advises” Steve, himself served as CEO of a company that went into bankruptcy. And it’s hardly a coincidence that Endeavor, the marketing agency Steve just hired, costing millions of dollars, is owned by the same company where Shapiro is co-president.
Keep in mind that while Schnatter is laying on the toppings pretty thick, he is no angel either. His downfall can be traced to a conference call in May where he was heard using a racial slur.
A Papa John’s spokeswoman responded to the letter telling CNBC in a statement:
Once again, John Schnatter is making untrue and disparaging statements in a self-serving attempt to distract from the damaging impact his own words and actions have had on the Company and our stakeholders.
Shares of Papa John’s were last seen up about 2% at $45.96, with a consensus analyst price target of $51.08 and a 52-week range of $38.05 to $77.25.
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