Coverage: Papa John’s founder Schnatter steps down as CEO

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.

Zlati Meyer of USA Today had the news:

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.

Kate Taylor of Business Insider reported that Schnatter had previously stepped down in 2005:

This is not the first time Schnatter has stepped down as CEO — he did so in 2005, after a period of declining sales at the company, then returned three years later.

Schnatter has a history of making political statements that spark controversy.

He came under fire in 2012 for saying the Affordable Care Act, the healthcare law better known as Obamacare, would be a “lose-lose” for Papa John’s franchisees and employees. Schnatter argued that it would cost Papa John’s $5 million to $8 million annually and ultimately drive up the price of its pizza.

The backlash was swift, with many promising to boycott Papa John’s. The company’s shares slumped about 4.2% at the time, Forbes reported.

Nick Turner of Bloomberg News reported that the new CEO will be one of Schnatter’s lieutenants:

Company founder John Schnatter will hand the reins to Chief Operating Officer Steve Ritchie as of Jan. 1. The 43-year-old Ritchie, who began as a Papa John’s customer-service rep making $6 an hour in 1996, has been overseeing operations for the past three years.

The move comes less than two months after Schnatter inflamed an outcry over NFL players kneeling during the national anthem. The CEO, whose company is a top sponsor of the league, said that the player protests were mishandled by NFL leadership and hurt the pizza chain’s sales. Papa John’s later apologized for the “divisive” comments.

Schnatter, 56, will remain chairman of the company, which ranks as the third-largest pizza chain. Though the executive will continue to focus on product quality and customer satisfaction, he also plans to pursue “his personal passion for entrepreneurship, leadership development and education,” Papa John’s said.

The company takes pride in hiring from within, saying that 98 percent of its restaurant managers are promoted from hourly jobs. Ritchie worked as a delivery driver and store manager before becoming operating chief in 2014 and president in 2015.