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No pizza slushies in the near future

Tim Nelson
July 19, 2018

It’s been a rough week for John Schnatter, the Papa John man. Further ousted from the company following a racial slur uttered on a conference call, Schantter has resigned as chairman of the board and will no longer be used in any Papa John’s branding. And while that’s bad news for him, it looks like the incident he caused has stalled (and may have even stopped) a merger that would’ve shaken up the fast food world.

 

According to the Wall Street Journal, Papa John’s and Wendy’s were engaged in preliminary talks to discuss a merger when news of Schnatter’s slur went public. Such a move would’ve brought together the third-largest pizza delivery chain with the third-largest fast food burger company, undeniably a power move. Those exploratory conversations have since paused given the toxicity of the Papa John’s brand at the moment. It doesn’t sound like the two sides got to the point of discussing any potential deal structures or pricing models, but the WSJ reports that Papa John’s and Wendy’s are worth $1.73 billion and $4.25 billion respectively.

This wasn’t the first time that Schnatter has damaged the Papa John’s brand. In December, he blamed slumping sales of his thoroughly mediocre pizza on NFL players protesting the national anthem, an outburst that caused the company to strip him of his CEO title. Rather ironically, the May conference call that started this latest controversy was an attempt to prep Papa John to serve as the brand’s spokesman again after the NFL incident. Props to Schnatter for being so astoundingly idiotic that he managed to create a new controversy during an exercise that was specifically designed to help him avoid another one.

While Papa John’s will now dissociate itself from its founder to the fullest possible extent by removing him from branding and accepting his resignation as chairman of the board, they haven’t yet figured out a way to get him out of their hair entirely. He’s still on the board of directors and has a 29% ownership stake in the company. He might just stick around until next May, when shareholders can vote him out at their annual meeting. For his part, Schnatter already informed the board that he views his resignation from the chairmanship as a mistake, and he’s hired an attorney to fight any further moves to oust him.

Naturally, the rest of Papa John’s executive team is (naturally) ready to move on. "Papa John’s is not an individual," new CEO Steve Ritchie said in a recent statement. "Papa John’s is a pizza company with 120,000 corporate and franchise team members around the world. Our employees represent all walks of life, and we are committed to fostering an inclusive and equitable workplace for all.”

In an effort to convince the public of that sentiment, the Papa John’s board to hire a Washington, DC firm to conduct a “cultural audit and investigation” of the company. It’ll hopefully address what seems to be a pretty toxic work environment, one where Schnatter was allegedly “spying on workers” and engaging in sexually inappropriate conduct. No timeline or expected changes resulting from such an investigation have been announced.

For now, we’re left to ponder what a Wendy’s-Papa John’s merger might have entailed. Are we missing out on Baconator pizzas? Burgers with mozzarella and cardboard in them? If you’re somehow upset that you’re missing out on the fusion of crappy pizza with decent-to-good fast food burgers, just know that you should blame the original Papa John being a racist prick for killing your dreams.  

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