I founded Papa John’s in 1984 with a single oven and a simple promise: quality is paramount. That promise turned a broom closet in Jeffersonville, Indiana, into one of the largest pizza chains in the world.

But today, the company my team and I built is struggling and the reasons are clear and have been clear to anyone willing to look at the fundamentals, which I have commented on publicly many times in recent years.

To begin, it’s been years since Papa John’s competed on quality positioning, thus commoditizing the brand. Instead, the company has been chasing Earnings Per Share (EPS), sales gimmicks, and lower price points.

As a result, Papa John’s has lost its point of differentiation. When I started the company in 1984, Little Caesar’s focused on price, Dominos focused on speed, and Pizza Hut focused on product innovation, but nobody focused on quality until Papa John’s came along.

Thus, for some time, Papa John’s has been losing customer traffic and struggling with sales. So, it’s been resorting to desperate tactics, such as recent buy-one-get-one-free deals.

But that’s not a successful strategy — it’s a distress signal warning of negative sales and the loss of customers because of the commoditization of the brand.

We’ve seen this before when we veered off course in the late 1990s and the company tried to boost sales with discounting. It didn’t work then, and it won’t work now — we had to fix quality first.

With the amount of potential store closings, negative traffic, and negative sales, Papa John’s could soon be in a position where the dividends it pays out to shareholders exceed the free cash flow it’s generating. This could happen in Q3 or Q4 of 2025 and may be an alarm bell to investors for more negative trends in the future.

This isn’t just a matter of pride or nostalgia. Numbers speak for themselves. North American same-store sales have been declining for two and a half years. In the same period, pretax income fell by 30 percent, and I believe Q3 could show these trends getting worse.

During the first half of 2025, Papa John’s had 41 net store closings. With the distribution curve of financially unhealthy stores today, my opinion is that net store closings could reach 200-500 in the next 30 months.

Hiding behind unsustainable quarterly EPS figures and dividend payouts, the Board of Directors continues to head fake Wall Street by raising food-service margins, drastic and unhealthy cost cutting, as well as charging what some believe are excessive fees to franchisees, thus destroying unit economics for both corporate and franchisee-owned stores.

Furthermore, I think the product is no longer superior — it’s mediocre at best because of bad corporate decision making. They’ve changed the recipe, lowered ingredient quality, no longer make the pizza correctly, and I suspect, no longer calibrate the pizza ovens properly — all without franchisee consent or approval.

I also believe morale inside the company may be low and that franchisees could be terrified of losing their businesses that were succeeding years ago before I left. While franchisees care deeply about the brand, they may feel neglected and unheard.

If the unit economics are unhealthy, it could make it difficult for franchisees to stay afloat, which would have a very negative effect on their families, employees, and their futures.

There’s nothing I wouldn’t do help the franchisees and the company turn this ship around. Yet, the Board has made no attempt to contact me for help.

Despite my success in revealing the truth of the cancel-culture set-up in 2018, and my past experience in leading two prior turn-arounds at the company in similar situations, I have been forced to watch from the sidelines as the brand crumbles.

Many franchisees think this could be a good time for the Board to reconcile with the founder and get advice and counsel from the guy who built the machine they’re operating.

Papa John’s current CEO Todd Penegor inherited a mess. He’s a very capable CEO who understands the fundamentals of what needs to be done, and if given the right support from the Board, he has the chance to prevail.

Todd must be fully empowered by the Board to fix the fundamentals: restore food quality, enhance the customer experience, reignite customer traffic, and repair unit economics for the franchisees. That means long-term investment, not short-term financial engineering.

He also needs the freedom to listen to anyone who can help, including those of us who’ve walked in his shoes.

The good news is it may not be too late. We’ve fixed it twice before by relentlessly focusing on product, people, and execution. That same formula can work again, but it requires leadership that prioritizes the long-term health of the business.

There is still hope. And there is still a path forward — if the leadership team chooses to walk it.
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John Schnatter is the founder and former Chairman and CEO of Papa John’s International (PZZA).