News

Papa John's-Wendy's merger?

July 19, 2018

The No. 3 pizza brand and No. 3 burger brand have reportedly begun preliminary talks about the possibility of a merger, according to the Wall Street Journal. The newspaper cites unnamed sources that it called "people familiar with the matter" as reporting that Papa John's embattled founder John Schnatter had begun talking to Wendy's before the events of the last two weeks that ended up with Schnatter resigning his board chairmanship. 

The talks — which the Wall Street Journal said the pizza brand's board members knew about — have apparently been put on ice following news of a May media training call in which Schnatter allegedly used a racial slur and described racially motivated slayings in his hometown during his youth.That event's airing in the media ultimately resulted in Papa John's moving to drop an agreement that gave Schnatter an office in the company's headquarters as well as a series of other actions, including the launch of an independent audit of the brand's corporate culture.

Papa John's investors have reacted positively to both Schnatter's departure as board chair and news of the talks with Wendy's, according to the newspaper. Wendy's has experienced several years of sales growth and is the world's third largest burger chains behind McDonald's and Burger King. Papa John's is the third largest pizza delivery chain behind Domino's and Pizza Hut.