Papa John's Offering Financial Assistance To Struggling Franchises

(RTTNews) - Papa John's International, Inc. (PZZA) is now offering financial help to struggling franchises hurt by PR crisis created by the pizza chain's founder and former CEO & chairman John Schnatter.

Papa John's has announced a new assistance program for its franchisees in the United States and Canada. "This program addresses the sales and operating challenges following comments made by the company's founder," the company said in a statement.

The assistance program for domestic franchisees includes certain reductions in royalties, food-service pricing and online fees through 2018. In addition, funds will be provided to support new marketing and re-imaging initiatives consistent with the company's new brand direction.

"People are at the heart of our business, and this program is one of many actions we are taking to prioritize our team, address the recent challenges and move Papa John's forward," said Steve Ritchie, President and CEO of Papa John's.

Last month, John Schnatter, who founded Papa John's 34 years ago, was pressured to resign as chairman after he used a racial slur during a conference call that was arranged between Papa John's executives and marketing agency Laundry Service. It was designed as a role-playing exercise and public relations training for Schnatter after his withdrawal from ads in the wake of a dust-up with the National Football League.

Papa John's board also adopted a shareholder rights plan or poison pill strategy to prevent Schnatter from gaining control of the pizza chain.

Schnatter, who owns 29% of Papa John's shares has said he would not give up the control of the company without a fight.

Vaughn Frey, President of Papa John's Franchise Association (PJFA), said, "We believe it is time for the founder to move on. Steve is pursuing the right initiatives to reinvigorate growth and recognizes the importance of working together to move forward successfully. We appreciate the assistance being extended to our franchisees and believe the assistance program will help mitigate the impact that the founder's inexcusable words and actions have had on franchisees."