Shaq Hopes To Help Papa John's Rebound

Papa John’s International, Inc. PZZA needs to rebound from controversy. So it’s bringing in the best rebounder it could find.

The company, beset by several controversies over the last several months is adding former NBA center Shaquille O’Neal to its board, making him the company’s first African-American director as it tries to move past its troubles.

Those troubles included former CEO and chairman and company founder John Schnatter resigning after using a racial epithet during a conference call last year. O’Neal, who has ownership stakes in several other restaurants, acknowledged in an interview on CNBC Friday he was hoping to help smooth things out with customers and franchisees after the brand’s troubles.

“Listen, pizza’s fun,” O’Neal said. “Everyone that knows Shaquille O’Neal, they know that I’m in the fun business and we want to get this thing back on track.”

The move appeared to be a positive, as shares of the Louisville-based chain surged on Friday.

Brand Ambassador

O’Neal will be a brand ambassador on the marketing side for Papa John’s, and will also be an investor in nine of the company’s restaurants in O’Neal’s hometown of Atlanta. O’Neal said he approached Papa John’s about being a franchisee. It quickly became clear to company officials, however, that he could help the company in a larger role.

Papa John’s board chairman Jeff Smith said on CNBC it was immediately clear that O’Neal is a “natural marketer."

O’Neal said Schnatter's racial remark controversy and others that surrounded the one-time face of the company “probably did” affect Papa John’s sales, “but now we have new leadership.”

“I want to be the one to help get everyone back on track,” he said.

O’Neal said that was important for some 800 franchisees, after what the company’s CEO Steve Ritchie acknowledged on CNBC clearly was a difficult year.

Sales Goals

The best way the company can help those franchisees is getting sales back in the black, said Ritchie. The company has forecasted negative sales for the year.
“Obviously our goal is to get back to positive sales,” Richie said. “The addition of Shaquille on the board. I think, is really going to highlight what we need to do from a marketing stand to get those sales moving.”

O’Neal adds pizza shops to a list of other restaurants he owns, including a Krispy Kreme Doughnuts franchise in Atlanta, the Big Chicken restaurant in Las Vegas that O’Neal founded and Shaquille’s, a fine-dining restaurant in Los Angeles. He previously owned 27 Five Guys Burgers and Fries franchises. The new venture made sense to him, O’Neal said, not just because the company has been in trouble, but because it fit with his public persona of a guy who likes to have fun.
“Everyone loves pizza," he said. "And pizza loves everyone.”

Price Action

Papa John's stock was up 3.8 percent Friday to $48.67 per share.

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