The founder lets go
Papa John's Pizza founder John Schnatter hung up his oven mitts, but the company is still thriving.
(Fortune Magazine) -- John Schnatter sold his first pizza in 1984, out of a renovated broom closet in his father's tavern. By the time Papa John's debuted on the Fastest-Growing list a decade later, it was a $162-million-a-year company with more than 600 stores. Today Papa John's is the country's third-largest pizza chain (behind Domino's Pizza (Charts) and Pizza Hut), with more than 2,600 outlets. Schnatter, who hung up his oven mitts in April 2005 when former Blockbuster president Nigel Travis took over as CEO, can still be a proud papa. The company's stock is up 518% from its Fastest-Growing days, and 98% since Travis got the job.
Not that it was always as smooth as melted cheese; revenues fell in 2002 and 2003, thanks to the Atkins craze, a wobbly economy, and declining sales in Britain. And in the U.S. an order-by-web program drained cash. But overall, the record is solid. Revenues reached $969 million last year, and international expansion is hitting its stride; in the next decade, about 500 new restaurants are planned for China, India, and Korea.
Most important, after the hard times of 2002-03, same-store sales have revived nicely, up 7.4% in 2005 -- that's more than rival Domino's. And Papa John's increased profit 98% last year, while Domino's showed a 74% rise. The introduction of Papa's Perfect Pan Pizza -- a square-shaped deep-dish delicacy -- in September 2005 was a financial and gustatory triumph.
Think of it this way: If you had invested $10,000 when Papa John's first made the Fastest-Growing list, today you would have almost $52,000 in your pocket. Now, that's tasty.
At a Glance