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  • ANALYSIS: Meet the new boss. Different from the old boss.

As announced this week, Papa John's will in April get a new chief executive officer and president by the name of Nigel Travis. His appointment will mark the first time company founder John Schnatter will not be Papa John's CEO.

Not only has Schnatter toiled in the top post for the better part of two decades, he has served long stretches as president, including an ongoing five-year stint following Blaine Hurst's departure in 2000. Add to that, he's the chairman of the board.

That's one busy man.

According to published reports, when Travis, an Englishman, resigned as chief operating officer and president of Blockbuster Inc., his main reason for leaving the video giant was to pursue a CEO's position.

Well, he's

Steve Coomes, Senior Editor

found one, and it's a doozy.

But I wonder whether Travis will be as challenged adapting to his new posts (he will be president PJ's as well) as Schnatter will be in relinquishing his old ones. For all intents and purposes, John Schnatter is Papa John's. His mug is tied to most of the company's marketing materials, and few, if any, major decisions are made without his approval. He embodies the well-worn phrase, "hands-on leader."

And yet, he's promising to allow Travis to serve fully as CEO and president, which requires steering the No. 3 pizza chain in a direction Travis thinks best. Backing off and letting him do that can't be easy.

The leap Schnatter's taking in handing over so much responsibility isn't exactly fraught with peril; Travis is no amateur, and he's got an experienced staff to help him. But such a move does come with considerable trepidation; it has to be a little nerve wracking to invite someone in to the company you founded, knight him co-boss and step back and see what happens.

That said, the question becomes this: Is it possible?

Driven

Schnatter is a classic entrepreneur: bent on success, consumed by a vision for his company, a product-oriented perfectionist and a demanding leader. Quite simply, you don't create and grow a company to nearly 2,900 units by being anything else. Recall the similar careers of Tom Monaghan (founder of Domino's Pizza), Frank Carney (co-founder of Pizza Hut and now a Papa John's franchisee) and Mike and Marian Illitch (co-founders of Little Caesars) to see what I mean.

And then consider how differently each of these pizza companies are today, now that some of their founders are gone and some have stayed.

Pizza Hut: It's the world's largest chain, a title it may never relinquish, and yet Carney left in 1980. Despite setting the standard for all other chain pizza restaurants, Pizza Hut struggled for years to redefine itself as the pizza industry became less of a sit-down business and more a delivery business. And yet, all the while, it never stopped growing, and its ability to turn out new and successful products continues to propel its growth — all in the absence of founder Carney.

Domino's Pizza: It became the world's second-largest chain at the hands of Monaghan, who led its growth to 6,000-plus units — and then it hit the wall. Already wealthy, Monaghan sold the company for more than a billion dollars in 1998 to pursue philanthropic activities.

In 1999 David Brandon took over as CEO and restarted the company's growth engine by building a crack leadership team (made up mostly of outsiders) and improving relations with franchisees. Under his direction, Domino's has added about 1,000 stores, freshened its marketing, developed numerous new products and become a public company. Interestingly, Brandon had no prior pizza experience.

Little Caesars: The world's fourth-largest chain may have been the world's second largest at one time, but the family-owned company never publishes unit numbers or sales figures. (Sources close to the company have told me store counts peaked at better than 5,000 in the late 1980s, but that they've slid backward into the 3,000s now.) The Illitches have always been secretive about the inner workings of their business, and, hey, when you own the joint, that's your right.

The relationship between the Illitches — who've owned and operated the chain for 45 years — and Little Caesars franchisees is much better known. Bitter, contentious and untrusting sums it up, and it doesn't appear to be improving. Neither party trusts the other, and both blame the other for the company's ongoing problems.

Amid the strife, the company has produced a modest turnaround centered mostly on selling steeply discounted pizzas. It's been years, however, since Little Caesars developed a noteworthy, high-profile product, and its once-trumpeted international advances continue to disappear.

It makes outsiders wonder whether a leadership change is overdue in Detroit, and whether, just as happened at Domino's and Pizza Hut, the founders-entrepreneurs should step aside and seek outside help from someone with a fresh perspective.

Without a doubt, the Illitches would say no.

Papa John's: Stock analysts have wondered the same about Schnatter for some time. They've questioned whether the firebrand entrepreneur had reached his maximum potential as the leader of the world's third-largest pizza chain when its explosive growth stalled around 2001. Even Schnatter expressed some doubts in himself, saying late last year that if he couldn't turn the company around within the first 100 days of 2005, he'd move to find a new CEO.

Apparently Travis's hiring is proof that Schnatter believes the time is right for a new opinion.

Meet the new boss

A 10-minute phone interview is not nearly enough time to take a measure of a man, but Nigel Travis is, at the very least, engaging. His positive attitude toward the stiff challenge that lies ahead is contagious, and his promise of full engagement in the job is believable. "John is a young man with a lot of energy ... . He and I seem to be on the same wavelength," said Travis, 54. (Schnatter is 42.) "Put John's energy together with mine, and that may be a lethal combination."

He knows it won't be easy moving into Schnatter's domain and training under him in order to assume many of his duties. But he's confident he and the founder have an understanding of what they have to do to make the relationship work.

What also makes him confident he can be equally yoked with Schnatter is the fact that Papa John's board of directors didn't force him to make the change. Schnatter made the move and then sought board approval.

"This was something he initiated himself. He believes it's the right thing, and the board supported his decision," Travis said.

Travis will be seeking the support of a multifaceted audience: the board; Papa John's franchisees; pizza customers; shareholders; and Schnatter himself. Knowing which of that group needs the most attention and when will require a master's touch, which Travis thinks he has.

"My background includes 20 years in human resources ... and if I look at what I think I'm good at, it's leading large numbers of people," he said. "I had 85,000 people at Blockbuster, and I gained some excellent experience there."

He said he also learned to work with and take care of franchisees at Burger King and Blockbuster, skills and experiences he'll need to draw on if he's going to ease tensions and narrow the gap between Papa John's corporate and its franchisees.

Meantime, he's not forgetting who hired him or who built the company which is giving him his first CEO opportunity.

"What John has done is fantastic. To have taken the company and built it to over 2,800 restaurants should not be overlooked," he said. "But it needs taking to the next level."

Which means exactly what?

Revitalizing the American market and boosting overseas growth, he said.

"I'm determined to make us a strong international force," he said. "But I don't want you to think that because I'm British that I'll focus any less on America. America is our biggest, and will remain, our best market. We want to make it more profitable and develop our proposition and our brand as fast as we can."

Schnatter would have it no other way.

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