Papa John’s announced that the company will invest another $80 Million in its franchisees and marketing, while the difficulties encountered by the pizza chain put pressure on its operators.
The financial assistance agreement between the company and the US franchisees, which will begin in the third fiscal quarter of 2019 and end in 2020, is supported by the franchise group elected Papa John’s.
“The strength of our brand and franchisees is central to Papa John’s long-term success. We are pleased to announce that Papa John’s will significantly invest in the promising future of our brand,” said Steve Ritchie, CEO of the brand, Papa John’s, in a statement.
Papa John’s has been struggling since company’s founder John Schnatter held responsible for the leadership of National Football League in November 2017. Turnover fell, but after the public relations crisis that followed the announcement nearly a year ago, Schnatter used an n-word on a conference call. Revenues fell 11.8% in 2018 to $ 1.6 billion from the previous year.
To keep stores to the upbeat, the chain has reduced fees, royalties, and commissions for franchisees. Over the past six quarters, Papa John’s has spent $40 million in funding for its operators and increased its contributions to the common marketing fund.
Papa John also invited former basketball star Shaquille O’Neal to become the brand’s new face and his first African-American board member. The three-year contract of approval will yield $ 8.25 Million, half paid in cash and a half in shares of Papa John’s. O’Neal also invested in nine of Papa John’s stores in Atlanta.
However, the actions that Papa John’s took to operate its business have led to the performance of the actions so far this year. The stock, which has a market value of $ 1.5 billion, has risen 22% since the beginning of the year but remains 5% below the previous year.