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Papa John's CEO: John Schnatter still 'believes in the core values of the brand'

February 6, 2019

Proof that cash may mend wounds comes this week by way of Papa John's CEO Steve Ritchie —  who just days after the announcement that the brand would get a $200 million investment from Starboard Value —  told CNBC that he doesn't question Schnatter's belief in the core values of the Papa John's brand. 

"John is a very large shareholder with the brand and the decision that we arrived at was to do what was in the best interest of our shareholders and stakeholders. So obviously we believe that he's going to benefit from that as we," Ritchie said,according to the transcripts from the interview.

"John believes in the core values of the brand that I've talked about on quality and people. So, I certainly would not question that and, obviously, we're hopeful we can bring John along. It's a journey.

That, of course, would require the often-outspoken restaurateur to both agree that the Starboard decision was a good one and end the all-out media war between Schnatter and the company that started last spring after news leaked that Schnatter made racial slurs during a media training call last May. 
 
Schnatter and the company's leadership — including Richie — have been publicly locking horns since the founder's ouster as Papa John's chairman following news of that media training call. Since then, the brand's value has plummeted on the Nasdaq, dropping down to a 2-plus year low on Feb. 1 of $38.51. But with the Starboard news Monday, that value has since sprung up and was at $43.75 this morning before the markets opened. 
 
But that Starboard deal also reduces Schnatter's stake in the company down to 26 percent, according to a CNBC source. Likewise, an SEC filing shows that the company also rejected a competing plan Schnatter offered Papa John's after he learned of what was then just a proposal by Starboard. To add salt to that wound possibly in Schnatter's eyes, Monday's announcement also included the fact that Starboard CEO Jeff Smith has now been named Papa John's board chair.
 
Smith, by the way, is credited with the turnaround of casual brand, Olive Garden, and told CNBC he sees similarities between that brand pre-turnaround status and Papa John's.