John Schnatter

Jun 09 issue

Twenty-five years ago in Indiana, Papa John’s founder and CEO John Schnatter sold his car to buy his first pizza oven. The franchise now has sales of more than $1 billion and just opened its 50th store in London

In the early days, two things I didn’t anticipate were how much money we would need, and how many great people it would take to build the business. That naivety caused problems early on, and we couldn’t move as fast as we could or should have done because of it.

Having said that, I did hire some good people, but I didn’t always listen to them. One of them wanted me to buy a fancy coffee machine and I remember saying, ‘Coffee machines don’t make pizzas’.

We were really tight for funds until 1993, constantly robbing Peter to pay Paul. In June of that year we went public and got an infusion of cash – that was what got us through the window of opportunity. The shares started at four or five dollars and they’re now $26.55, so our shareholders have had a pretty good run with us.

Managing that transition from a one or two person company to having 2,500 stores in the US hasn’t always been easy. It’s something we’re still working on today. Papa John’s used to lean towards being a dictatorship or a kingship – now we run on a head coach model. So before we told people what to do, now we bring them along, help them do what they do.

The reason for that is that Papa John’s needs to be a people-growing machine: we need to grow people from within. That’s the key to building it to a 4,000 or 5,000 store scale.

Letting go
At times it’s been hard to delegate, but not on the store level. On the store and supervisor level I was able to delegate really early. In fact I overshot the runway a bit, maybe delegated too much in the late 1990s. As I get older I’ve learned to trust my own judgement more: I was probably more open to new ways of doing things ten years ago than I am today. When it comes to commercial relationships, whether with suppliers or franchisees, and the quality of our products, our core values are fixed.

Having said that, in other ways I’ve actually become more flexible. I’m open to different styles of mentoring or coaching, and if one of our franchisees wants to have a salad bar because that works in a certain market, I’m very open to that.

When we started, the only marketing we had was our product and service. If we didn’t do a good job we didn’t have any marketing. You can use sophisticated tools but at the end of the day you can only build a brand with demonstrable value. If I talk about better ingredients, better pizza then don’t deliver on that then it doesn’t matter how many advertising dollars I spend.

We don’t try to be all things to all people. We present ourselves as what we believe we are: the best pizzas, nothing more, nothing less. It takes a lot of discipline to stick to that, but if you try to be all things to everybody you’ll end up being nothing to nobody.

I don’t regret the comments I made on Radio 4 last year. All I said was that pizzas are very nutritious but you don’t eat whole pizzas. I eat pizza three or four times a week, sometimes two or three times a day – I just don’t sit down and eat a whole pizza.

No train no gain
The most important lesson I’ve learned is about coaching people. At a young age you probably don’t have that wisdom. Now we have the ability to measure and replicate what works: I wish I’d had those systems in 1994, but you don’t tend to have that in place as a relatively young company.

The main thing is that we’re still growing and we’re still having fun. Pizza’s a fun game.