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Papa John’s CEO, pizza titan John Schnatter, steps down

John Schnatter (U.S. Army National Guard Photo by Army Capt. Rick Scoggins, North Carolina National Guard Public Affairs Office/Released)

Papa John’s CEO John Schnatter, who overcame the odds to build his home-delivery pizza chain into a national powerhouse against entrenched rivals, is stepping down.

Schnatter, who founded the pizza chain in 1984, will remain as chairman of the board. No immediate reason was given for his decision, which takes effect Jan. 1. He is being replaced CEO is company President Steve Ritchie.

As the founder, Schnatter has been one of the biggest names in fast food. But he recently ran into controversy when he blamed NFL players’ mass move to drop to one knee during the playing of the national anthem as affecting his company’s sales.

Schnatter has been one of the last CEOs who also act as their brand’s advertising pitchman, a list that once included Col. Harland Sanders for Kentucky Fried Chicken and Dave Thomas of Wendy’s. By stressing that Papa John’s had better ingredients and a better tasting product, he was able to turn the burgeoning chain into a national force against giants like Domino’s Pizza and Pizza Hut.

Papa John’s, which lays claim to being the nation’s third-largest pizza chain, could not be reached immediately for comment.

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The company, which has more than 5,000 locations worldwide, said in a statement that Schnatter will continue to “pursue his personal passion for entrepreneurship, leadership development and education.”

But his impending title change caught restaurant industry watchers by surprise.

“At the very least, it was distracting and I’m wondering whether this was board-driven or if it was John’s choice,” said restaurant consultant John Gordon of the Pacific Management Consulting Group.

CFRA equity analyst Efraim Levy said he had anticipated a shift was coming soon in the company.

“I see mostly strategic continuity, but I expect Steve Ritchie to also put his own imprint” on Papa John’s,” he said.

Louisville-based Papa John’s is the official pizza sponsor of the National Football League, which Schnatter slammed in November for not dealing with players who’ve been kneeling during the Star Spangled Banner to protest racial injustice. The movement began with then-San Francisco 49ers quarterback Colin Kaepernick in 2016.

“The NFL has been a long and valued partner over the years. But we’re certainly disappointed that the NFL and its leadership did not resolve the ongoing situation to the satisfaction of all parties long ago,” Schnatter said during a Nov. 1 analyst call. “This should’ve been nipped in the bud a year-and-a-half ago.”

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On Nov. 14, the company sent out an I’m-sorry tweet: “The statements made on our earnings call were describing the factors that impact our business and we sincerely apologize to anyone that thought they were divisive.”

Schnatter isn’t the first founder to step away recently from CEO duties at the company he built from scratch. Last month, Chipotle Mexican Grill CEO Steve Ells would become executive chairman and Panera Bread’s Ron Shaich announced that he would step down, but retain his position as board chairman.

And Schnatter himself has said goodbye to the CEO gig before. He stepped down in 2005, but returned in 2008. In 2010, he took on a co-CEO, Jude Thompson, but that arrangement ended the following year.

Now Papa John’s may decide to find a new pitchman besides Schnatter.

“He’s in every ad,” Gordon said. “That’s very CEO-centric marketing, which is pretty unusual these days. We’ll see if he steps back from that.”

He added, “He and/or the board see the need to get him out of the line on fire and to continue his involvement in a less visible way.”

Papa John’s stock closed at $59.23, down 2 cents or 0.03% on Thursday.The CEO announcement was made after the market has closed.

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© 2017 USA Today

Distributed by Tribune Content Agency, LLC.