Oh Snap, Papa John's Franchisees Are Lawyering Up

We haven't checked in with Papa John's in a while, wonder what's going on over there? Turns out, the pizza chain is still in a sales slump after it was revealed that founder John Schnatter used a racial slur during a marketing phone call, following Schnatter's controversial anti-NFL remarks after the national anthem controversy last year. Schnatter subsequently resigned as chair of the Papa John's board, then soon regretted resigning. Papa John's the company tried to separate itself from its founder of the same name, but a series of legal back-and-forths had many despairing over whether the Papas John would ever really be free of each other.

Here's the latest in the As The Papa Turns saga: Bloomberg is reporting that frustrated PJ franchise owners have hired a "specialist lawyer as sales sag" to represent them in talks with Papa John's the company as well as with Schnatter. "The group, which represents about 44 percent of franchised restaurants in North America, says franchisees have incurred 'tremendous financial losses' after it was reported that Schnatter used a racial slur, his controversial comments on the NFL anthem protests and reports of sexual harassment at the chain." Papa John's has been helping franchisees with royalty reductions and advertising budgets, and it looks like these efforts will have to continue. In a statement, industry attorney Robert Zarco stated that "The damage to the brand image and the franchisees' businesses has persisted and continues to persist."

CNN confirms today that "Papa John's is still struggling to bring customers back," and the chain's legal difficulties with Schnatter continue. Although CNN points out that pizza chains like Domino's and Pizza Hut also just reported a difficult third quarter, it doesn't look like PJ's prospects will be brightening significantly anytime soon. However, CEO Steve Ritchie points to widespread diversity training and online promotions through a mobile app as recent positive efforts by the chain.