Attention Papa John's employees: Papa says he still loves you.
Escalating his battle with the company he founded, ousted Papa John’s chairman John Schnatter tells "fellow team members" in a full-page ad in Wednesday's Courier Journal that he misses them “more than words can express” and that “we will all get through this together.”
In the ad, placed by the firm handling Schnatter’s public relations, the founder of the world's third-largest pizza company says current managers “will not let me talk to you and this has been very difficult.”
The open letter to employees doesn’t specify whether Schnatter wants to return as chairman, but he tells them “you are the heart and soul of this company” and “in every minute of every day you are all in my thoughts and prayers.”
The ad also directs readers to a new website, on which he says: "The board wants to silence me. So this is my website, and my way to talk to you."
The site includes a letter from one of Schnatter's lawyers challenging the company's right to lock him out of the company's headquarters and another complaining that it has stopped subsidizing security at his Anchorage mansion.
In a statement, the company said: “Stakeholders, including customers, franchisees, employees, and investors, have expressed strong support for the actions we have taken to separate our brand from Mr. Schnatter. No matter what John does, he will not be able to distract from the inappropriate comments he made.”
Papa John's has about 1,200 employees in Louisville, including 650 in its corporate headquarters. Including workers at its franchises, it has about 120,000 employees worldwide.
Schnatter vowed earlier this month that he is “not going away and will continue to fight to do what’s best for the company and its employees, franchisees, shareholders and customers.”
He resigned from the board on July 11 after Forbes disclosed that he had used the N-word in a media training session in May, but he later said quitting was a mistake. He has sued the company seeking documents that detail what he calls the “heavy-handed” way the company has treated him.
The ad ramps up the conflict between Schnatter, who owns nearly 30 percent of the company and remains on its board, and the company’s management, including CEO Steve Ritchie, Schnatter's handpicked successor. Schnatter has since criticized Ritchie's performance and demanded his firing.
An analyst who follows the pizza industry said the “ongoing drama” between Schnatter and management was “destroying shareholder value,'' while another said "a complete separation" of Schnatter from the business "is the right thing to do," though the founder is "digging in his heels."
Forbes reported Saturday that pictures of Schnatter have disappeared from corporate offices, including an image of his face painted on a ceiling. During an employee town hall on Aug. 14, Ritchie told employees that Schnatter requested the items be removed, Forbes reported.
Schnatter's missive to his former employees disputes that.
“This is not the case at all,” the ad says. “As you all know, Papa John’s is our life’s work and we will all get through this together, somehow, some way.”
The open letter closes with “Your Founder" and Schnatter’s first name.
Terry Fahn, a Schnatter spokesman who works for Sitrick and Company, the Los Angeles-based firm retained by Schnatter, would not comment on the ad. Nor would Fahn say what Schnatter hopes to accomplish with it.
The ad does not address Schnatter's remarks during a training session. He has said he didn't use the N-word as a slur and that his remarks were taken out of context.
Even before Schnatter stepped down as chairman, he was in a pitched battle with management over the company’s direction and his role as brand spokesman.
Ritchie, who was elevated to CEO on Jan. 1, blamed Schnatter for causing sales to plummet last November when Schnatter blamed sagging sales on the NFL’s handling of player protests during the national anthem.
Ritchie told analysts earlier this month that Schnatter’s comments were “inexcusable and irresponsible” and repairing the damaged brand could cost as much as $50 million.
The president of the Papa John's Franchise Association, Vaughn Frey, also said it's time for Schnatter to move on.
But Schnatter counters, saying that Papa John’s earnings began to fall before the NFL controversy — when Ritchie was in charge of the company’s day-to-day operations.
Papa John's stock (Nasdaq: PZZA) closed at $42.92 per share Tuesday, down from a high of $80.80 exactly a year ago.