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The Real Scoop on Papa John's and Obamacare

Posted: 11/20/2012 12:49 pm

Reading what has been written about statements I made on the effect of the Affordable Care Act on our franchisees reminds me of a quote from Lewis H. Lapham, former editor of Harper's magazine: "People may expect too much of journalism. Not only do they expect it to be entertaining, they expect it to be true."

Many in the media reported that I said Papa John's is going to close stores and cut jobs because of Obamacare. I never said that. The fact is we are going to open over hundreds of stores this year and next and increase employment by over 5,000 jobs worldwide. And, we have no plans to cut team hours as a result of the Affordable Care Act.

Clearly there was some misunderstanding somewhere. The remarks that generated the headlines were made during an entrepreneur class I was asked to speak to at a Florida college. I was asked to share my experience as an entrepreneur and to provide the students with real-life small business situations. Unbeknownst to me, until she identified herself, a reporter was there.

Here is the part of the interchange that was the genesis of the news:

Reporter: "Do you think your -- you know -- franchise owners... are going to cut people hours back to make them part time instead of full time?"

Me: "Well, in Hawaii there is a form of the same kind of health insurance and that's what you do, you find loopholes to get around it. That's what they're going to do."

Reporter: "My understanding is that if you're a full time employee, which is 35 hours or over, you'd be covered. Or if you're part time then you wouldn't be. So wouldn't some business owners just cut people down like 34 hours a week so they wouldn't have to pay for health insurance?"

Me: "It's common sense. It's what I call lose-lose."

The reporter asked what I believed Papa John's franchisees would do in response to Obamacare, not what Papa John's would do. In fact, her question was "wouldn't some business owners just cut people down like 34 hours a week so they wouldn't have to pay for health insurance?"

My answer: "It's common sense."

Companies like Papa John's are largely a collection of small independent businesses. The average Papa John's franchisee owns three to four stores. Since our franchisees own the restaurants they operate, who they hire, how many hours they give each employee and what they pay each employee is up to them, not me or Papa John's. Like any small business in these economic times, our franchisees are under a tremendous amount of pressure on costs.

During that same interview, talking about Obamacare I said, though it wasn't widely reported:

  • "The good news is 100% of the population (full-time workers) is going to get health insurance. I'm cool with that."
  • "We're all going to pay for it. There's nothing for free."
  • "And this way I get to provide health insurance and I'm not at a competitive disadvantage ... our competitors are going to have to do the same thing."

Papa John's, like most businesses, is still researching what the Affordable Care Act means to our operations. Regardless of the conclusion of our analysis, we will honor this law, as we do all laws, and continue to offer 100% of Papa John's corporate employees and workers in company-owned stores health insurance as we have since the company was founded in 1984.

John Schnatter is the founder, chairman and chief executive officer of Papa John's, which operates and franchises more than 4,000 delivery and carryout pizza restaurants worldwide.

 
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Reading what has been written about statements I made on the effect of the Affordable Care Act on our franchisees reminds me of a quote from Lewis H. Lapham, former editor of Harper's magazine: "Peopl...
Reading what has been written about statements I made on the effect of the Affordable Care Act on our franchisees reminds me of a quote from Lewis H. Lapham, former editor of Harper's magazine: "Peopl...
 
 
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02:22 PM on 01/09/2013
Papa Johns is mainly small franchises, none of whom have 25 cars so quit the culture of envy.

Those small businesses owners, who work harder than 34 hours a week I assure you, just wAnt to make a profit for their own families also.

Obama greedy friends may wnat their billions but all franchise owners want is to feed their own children.
03:19 PM on 01/10/2013
Please form a complete coherent thought.
06:13 PM on 01/10/2013
  Please form a complete coherent post.
Mary Zorski
Nothing to see here folks, move along.
05:06 PM on 01/02/2013
A man just came to my door wanting sponsors for some kids' sports charity, and guess who was selling pizza coupons for this cause? I had to tell this nice man no, and that if it were someone else donating the coupons, I'd be happy to, but as things stand with food service wages being what they are, I can't and won't back down from my boycott. Let John Schnatter contribute out of his own pocket what he's expecting me to donate out of mine. If he so bitterly resents healthcare for the many people who make and deliver his pizzas, he's going to have to stop sputtering "There was a reporter there.", and put his money where his mouth is. As I was on the committee for my company that authorized contributions for children's activities, I know that these kids will be well provided for by others that do not support what Schnatter did and said.
12:19 PM on 01/18/2013
"Let John Schnatter contribute out of his own pocket what he's expecting me to donate out of mine."

Definition of irony??? lol So let me get this straight Mary. You don't want to pay out of your pocket, something that you don't agree with? The comedy is rivaled only by the ignorance.
Mary Zorski
Nothing to see here folks, move along.
03:18 PM on 01/18/2013
What it comes down to is that I have the choice on whose business ethics I'm going to subsidize and whose I'm not. I don't have to support the profits of someone who obviously does not have the good of his employees in mind, and since I know these kid's sports programs are supported by many other people, I don't have to let my money go to supporting anything he's glorifying his way of thinking with. Insisting they name a stadium after him? Give me a break!
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Brian Beach
I post something, someone will always comment!
01:43 AM on 12/27/2012
While everyone is entitled to their opinion here, I will still be eating at Papa John's. It's nothing personal about your political beliefs. I find it disheartening that John Schnatter would makes such comments. Most Papa John's locations are owned by franchisers who are willing to help this company thrive. These owners in turn help him become successful. The bad publicity will certainly hurt the brand. But it's going to rebound after the keystrokes die down and the tempers cool off.
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heavensent51
08:59 AM on 12/26/2012
Lousy pizza anyway
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sfizi
The Great Seal of the Winged Skull 81
02:09 PM on 12/11/2012
when the moon in the sky look like a big pizza pie...
09:51 PM on 01/19/2013
thats Amory
01:57 PM on 12/07/2012
Interesting that you need to use the disclaimer of "I didn't know there was a reporter there" when it comes to what you said. Why would your answers have been different had you known? Furthermore that "analysis" you came out with has been proven incorrect -- you admit you are "still researching" yet you still came out with inflated numbers regarding rising costs caused by ACA. It is too little too late for you Mr. Schnatter. Your insistence that PJ's are "small independent businesses" does not hold water either. They are beholden to your corporation. The American people do not accept your "explanation" and do not support your disgusting level of corporate greed for which you make no apologies. No one in their right mind would pay to eat a pizza made by sick people that your company can't even treat with an ounce of dignity or appreciation.
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Matthew Minard
03:13 AM on 12/06/2012
you are a doucher and now the American people will destroy your company :)

How's that mansion and 24 car garage looking now?
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sfizi
The Great Seal of the Winged Skull 81
02:10 PM on 12/11/2012
he just added 3 more cars with the savings...
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Soda Sullican
Volvant bona tempora!
03:16 PM on 12/05/2012
John, you just don't get it. What you repeatedly call "common sense" is what most people would call "greed".
05:00 PM on 12/05/2012
How is it greed? We don't know what the overhead costs of these franchises are. Its someone's business which needs to be profitable. Greed is when you have a healthy profit, can afford to pay and insure employees, but choose to let some go to fatten your profit. Do we know which one applies here?
07:38 AM on 12/07/2012
Look at his house. That structure alone shows that his business is more than sustainably profitable. It shows that he has a large consistent spare capacity in his profitability which goes almost exclusively to him, and it shows that he cares more about amassing material possessions to the height of godhood instead of caring for the people who make any income possible. That is the logical basis for the claim of greed. He has made a personal choice to allow those who support him to suffer so that he can climb to more and more excessive heights of comfort.
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Soda Sullican
Volvant bona tempora!
06:40 PM on 12/07/2012
I think we do. In my opinion, you just described the owner's original threat. But you bring up a REALLY good point. No one should fault anyone wanting to achieve wealth. However, no one should condone greed either. I think one of the problems is that we let that line get blurred in our discussions.
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sfizi
The Great Seal of the Winged Skull 81
02:11 PM on 12/11/2012
agree if you don't own a business that is
09:11 AM on 12/05/2012
Here's an idea: Just apologize for what you said. I don't recall news stories where you claimed to be closing down stores. You did, however, make the statement that Papa John's stores will be limiting hours intentionally in order to subvert the Affordable Care Act (despite your "analysis" that said the cost would simply raise the price of a pie on the order of a few cents). After you made your political diatribe defending employers who deny full time benefits to full time employees, you gave away 2 million free pizzas for an NFL promotion.

Either apologize for your blatant deplorable comments and political activism, or risk losing a portion of the market share. You have every right to your opinion, and I have every right to order pizza from someone else (even if it's only due to your opinion).
12:24 AM on 01/17/2013
I agree with you. Oh by the way, am I the ONLY one that's noticed he doesn't use any African-Americans in his commericals -- just sayin'; why would we expect him to support an African-American president's policies -- I'm just sayin' -- something to think about -- plus his pizza ain't that good!!!!!
05:39 PM on 12/04/2012
You are going to purposefully LOOK for loopholes to get around providing for those employees whom, without them, you wouldn't even *be* in business?? I'm sorry, John... but you are what is wrong with a good deal of business owners in this country. Purposefully avoiding your civic responsibility is reprehensible. Especially if it is for money. Money over people? Money over country? What part of any of that do you think is the right and proper thing to do? Business is not 'make money by any means.' Anyone who thinks that is the case is not a person who can be trusted in any sense of the word.
04:33 PM on 12/04/2012
Bottom line is as a national brand owner, he needs to put a sock in it when it comes to politics. Customers don't care what he thinks unless they disagree with him. Then they don't want to buy his product. Papa John needs to stifle his urge to be the mouthpiece for Republican 'business values', an oxymoron if ever there was one. Politics are not good for business, period.
04:06 AM on 12/02/2012
Looks like Papa John's is going to start selling waffles. He just made a real big one and then applied as sweet a syrup as he could find to hide the real taste. Next there will be photo-ops with low-level employees as they first receive their healthcare coverage. That will be the sprinkled powdered sugar on top.
Everybody SMILE!
08:14 AM on 12/01/2012
My daughter is a manager at one of his corporate stores and has been for many years. She has had & continues to have health insurance, that she pays only a portion of the cost. I can only post what I know to be true, and the truth is Papa John’s has never denied health insurance to their employees.
05:08 PM on 12/04/2012
That's not the point Penny. Mr. Schnatter politicized his consumer product, a dumb move by any business person. Now he's having to play back-track, and the people who were put at risk are people like your daughter. There's public life and private life, those who mix the two are playing with dynamite. Mr. Schnatter rolled the dice and came up snake eyes, and no amount of hyperbole can un-do what's been done.
05:19 PM on 12/04/2012
"My daughter is a manager at one of his corporate stores"

What about the drivers and pizza makers? Do they have full coverage health insurance and only pay a portion of the cost? Managers nearly always have the benefits, they also have the salary level that comes with the benefits.
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Lisa Earle McLeod
Influence Expert, Leadership Speaker, Author
06:41 PM on 11/30/2012
Dear Mr. Schnatter,

I think you're a good guy. You couldn't have built such a successful business if you didn't care about your employees. This is your chance to be a hero.

Here's how you can emerge from this with more revenue, better morale, and great PR for you and your brand.

Read - What Papa John's CEO Should Be Saying (If he cares about sales)
http://www.huffingtonpost.com/lisa-earle-mcleod/what-papa-johns-ceo-shoul_b_2162308.html

I'm cheering for you to listen to your better angels.

Lisa McLeod
04:11 AM on 12/02/2012
"You couldn't have built such a successful business if you didn't care about your employees"

I'm sorry, but I do not see how that makes logical sense. I see the opposite conclusion making more sense. Every gain in 'efficiency' in any business is a theft against its employees, as it takes more out of them without giving them anything in return. Efficiency also causes unemployment. Why have 2 guys working if we can just whip 1 guy twice as hard? Brilliant! THAT is the attitude of successful business people in the main. And I don't really think that qualifies them as 'nice guys'.
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CheapTrick
Them or Us.
02:59 AM on 12/05/2012
Don't be silly. Many super successful businesses care nothing about their employees. Ask Debeers. Or Walmart. Your comment makes no sense. He clearly cares about himself and nobody else.
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rkreyn
Discipline - bridge between goals & accomplishment
06:25 AM on 11/30/2012
What he's really saying is his political advocacy is crushing his franchisees. He then proceeds to blaming the "misunderstanding" on his franchisees. They'll reduce hours or cut employees not me! Now that is cold and selfish.