Please write me a case study on the following

Problem Solving Application CaseBetter Ingredients. Better Pizza. Worst Spokesperson.

Papa Johns Pizza already faces an uphill battle to keep pace with its larger competitors, but the acrimonious ouster of founder and CEO John Schnatter is making their situation even more difficult. This activity is important because it illustrates how any high-profile company can be vulnerable to the public relations catastrophe resulting from senior leadership making controversial comments publicly, as well as the fallout from cutting ties with those leaders if it comes to that.

The goal of this activity is for you to critically evaluate Schnatters statements as well as both his and the companys actions in the aftermath of the company forcing him out.

Read about Papa Johns and the controversial comments made by founder John Schnatter. Then, using the three-step problem-solving approach, answer the questions that follow.

John Schnatter founded Papa Johns Pizza in a broom closet in his fathers tavern in 1984. The restaurant is now the fourth largest pizza delivery chain in the United States with more than 5,300 corporate and franchisee owned establishments worldwide.¹ Papa Johns revenues exceeded $1.5 billion in 2018 but were down for the first time in almost ten years.² The company is also down a spokesperson. Schnatter, better known as Papa John, was ousted by the organization after a series of controversial statements.³

Lets take a closer look at the issues facing Papa Johns and its founder.

Problematic Statements

Schnatter told college students in 2013 that he has a real problem with the English language while discussing his poor score on the verbal portion of the SAT. Those who know him seem to agree with that sentiment, but dont believe grammar is the underlying problem. For example, Steve Coomes, a restaurant industry journalist who has interviewed Schnatter a dozen times, wrote a blog post in 2018 titled A tale of a man who couldnt tame his tongue in which he profiled a CEO he claims has always said too much.⁴

One of Schnatters first controversial statements was in 2012 when he discussed the passage of President Obamas Affordable Care Act. What caught the publics attention was not his political opposition to the law, but the fact that he complained to shareholders that it would increase the cost of a large pizza by 14 cents. Papa Johns social media was soon inundated with outraged customers claiming they would pay a couple extra cents so Papa Johns employees had health insurance. Others said they would take their business to a restaurant that has empathy and doesnt begrudge their employees the ability to seek a doctor when theyre ill.⁵

Schnatter found a new target in 2017, the National Football League (NFL). Papa Johns was a significant sponsor of the league at the time that many players were kneeling during the national anthem to raise awareness of police brutality and social injustice. Again, Schnatter caused controversy because he could not keep his emotions and impulses under control. According to the Washington Post he said that the NFLs poor leadership and inability to stop the protests hurt the leagues TV ratings, which in turn hurt sales of his pizza because it is advertised heavily during games. To make matters worse, a white supremacist group embraced the remarks and dubbed Papa Johns as the official pizza of the alt-right. Papa Johns condemned the group and distanced itself from the endorsement, but the damage was already done and the company had to apologize for Schnatters divisive remarks.⁶ The NFL also broke ties with the company, according to the New York Times.⁷

Schnatter was forced to resign as the companys CEO after making the controversial comments about the NFL, but that did not stop him from continuing to cause public outrage with his statements. In May 2018 Schnatter, who was still serving as Papa Johns chairman at the time, used the n-word on a conference call with executives and a marketing agency when referring to African Americans. The marketing agency terminated its contract with Papa Johns and Schnatter was forced to resign as the companys chairman.⁸

Papa John Battles Papa Johns

Schnatters comments gravely injured the restaurant chain he founded. Sales at North American stores fell more than 7 percent in 2018 and the organizations stock lost a third of its value.⁹ Papa Johns tried to distance itself from Schnatter to stop the bleeding. The board of directors evicted Schnatter from the companys Louisville, Kentucky, headquarters, took him off pizza boxes and commercial materials, and directed him to cease all communications with internal and external stakeholders.¹⁰

Papa John would not go quietly though. He hurled multiple lawsuits at his former company and took out a full-page newspaper ad directing Papa Johns 120,000 employees to a website he set up. The website includes press releases, news articles, and public filings in support of Schnatter.¹¹

Papa Johns and Schnatter reached an agreement in 2019 to resolve many of their points of contention. As a result of the agreement, Schnatter will resign from the Papa Johns board of directors and cease litigation against his former company. However, the matter is far from closed. Schnatters spokesperson says he still retains his ability to assert new legal claims in the future related to his ouster.¹² Moreover, the founder is still the companys largest individual shareholder, owning a 19% stake.¹³

The Companys Continued Struggles

Papa Johns continues to reel under negative publicity even after Schnatters exile. The company has closed over 100 locations in the past year while competitors such as Dominos and Pizza Hut have opened new ones.¹⁴ It has also been forced to assist suffering franchisees by providing royalty relief and other types of subsidies, further deteriorating the companys bottom line.¹⁵