Papa don't preach

“Papa John” Schnatter — the founder of the pizza delivery giant that bears his name — explains how he set up a $1bn brand from scratch, and why people prefer not to take the healthy option

“Papa’s in the house,” a crowd of men and women chant repeatedly, as they stand parallel to one another, creating a narrow passageway for their idol. It’s hard not to raise a smile at this outpouring of American corporate culture in
conservative Dubai. But then Papa John himself — real-name John Schnatter — is no ordinary businessman.

As the big boss arrives at the front door of one of his many pizza outlets in Dubai, hands grip cameras. This is the moment his staff have all been waiting for.

It is safe to say that Schnatter, founder of the Papa John’s empire, probably felt like he was back home in Indiana, and not in sun-scorched Dubai. The firm that he set up is now America’s third-largest pizza delivery chain, sitting just behind Pizza Hut and Domino’s.

“When I was fifteen, I was washing dishes at a local pizza pub… I hated washing dishes… then I got promoted from dishwasher to making pizzas and I fell in love with it from the get go,” he says.

Back in Indiana, Schnatter constantly felt like there was a missing ingredient in national pizza chains, and so he decided to open up his own restaurant in order to fill the void. In fact, at the young age of 22, he knocked down a broom closet at his father’s bar, bought used restaurant equipment worth $1,600, and in no time, baked his dream to reality by delivering pizzas out of the back of the pub.

In 1984, the first Papa John’s restaurant opened its doors to the small town of Jeffersonville. Now, the company has nearly 4,000 shops worldwide. In fact, more than 25 years later, Schnatter has restaurants in 50 states and around 29 countries.

Last year, the Nasdaq-listed firm’s revenues topped $1.2bn, an eight percent rise on 2010, while net profits came in at $55.7 m, up seventeen percent. During a particularly tough time for the US economy, Papa John’s opened an additional 237 outlets. Those results compare to $1.7bn in revenues for Domino’s over the same period.

But the growth story wasn’t as smooth a ride as one might assume, Schnatter says.

“I had no idea we would ever go international. We started around twelve years ago and we were not very good at it,” he recalls. “When you come from a small town in the States, you do not know how to do it, it is intimidating. So, for the first four or five years, we kind of let each country do its own thing, and we were a total failure.”

“Five or six years ago, I started going around the planet and started picking up best practices of franchisees that were successful…what we found was, if the franchisee did it the Papa John’s way, they were successful,  but the people that were doing their own thing weren’t. So, I made a commitment that the Papa John’s way was how we were going to do it worldwide,” he continues.

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