Papa Johns Term Paper

Subject: Term Paper: Papa John’s Papa John’s International HISTORY OF COMPANY: Papa Johns was founded by John Schnatter. John worked at a local pizza pub in Jeffersonville, Indiana when he was in High School. While he was working there, he realized that there was something missing from the national pizza chains which was a superior-quality traditional pizza delivered right to the customer’s door. His dream was to one day open a pizza restaurant that would fill that void.In 1983, John Schnatter delivered his last campus pizza, picked up his business degree from Ball State University, and went back to Jeffersonville, Indiana. There, at age 22, he knocked down the broom closet in his father's tavern (Mick's Lounge); sold his prized 1971 Z28 Camaro, purchased $1,600 worth of used restaurant equipment, and began delivering pizzas out of the back of the bar. Papa John's opened its first pizza restaurant in 1984. (2) CORPORATE INFORMATION: Papa John’s Pizza Corpo rate Office is located at 2002 Papa John’s Boulevard, Louisville, KY 40299.Their phone number is (502)261-7272. The CEO is Nigel Travis, the COO is Jude Thompson, and the CFO is David Flanery. (1) STOCK MARKET INFORMATION: Papa John’s is under NASDAQ stock market and their symbol is PZZA. As of April 12, 2010, their Stock market price was $27. 88. Their stock prices are down -. 84. (6) COMPANY’S REPUTATION: Papa John's is the recognized quality leader of the pizza category and is the world's third largest pizza company. For nine of the last ten years, consumers have rated Papa John's No. in customer satisfaction among all national pizza chains in the American Customer Satisfaction Index (ACSI). Papa John's also was honored by Restaurants ; Institutions Magazine (R;I) with the 2009 Gold Award for Consumers' Choice in Chains in the pizza segment. In 2006, for the third consecutive year consumers have honored Papa John's (NASDAQ: PZZA) with the top rating among nat ional pizza delivery and take-out chains in the prestigious Restaurants ; Institutions' Consumers' Choice in Chains Survey.Papa John's, which earned its best overall score ever, outdistanced the next closest national take-out and delivery chain by a record margin of almost six points. Restaurants and Institutions' 2006 Consumers' Choice in Chains Survey National Pizza Delivery and Take-Out Chains ———————————————————————- Overall Score Atmosphere Cleanliness Convenience ——————— ————- ———- ———– ———– Papa John's 52. 31% 44% 52% ——————— ————- ———- ———– à ¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€œ Pizza Hut 46. 8 34 40 49 ——————— ————- ———- ———– ———– Little Caesars 44. 9 24 34 53 ——————— ————- ———- ———– ———– Domino's Pizza 43. 3 24 36 51 ———————————————————————-Food Quality Good Reputation Menu Variety Service Value ————– ———— ————— ———— ——- —– Papa John's 66% 64% 48% 50% 49% ————– ——à ¢â‚¬â€Ã¢â‚¬â€ ————— ———— ——- —– Pizza Hut 58 58 46 43 40 ————– ———— ————— ———— ——- —– Little Caesars 44 42 30 37 69 ————– ———— ————— ———— ——- —– Domino's Pizza 47 50 37 43 46 ———————————————————————- †¢For nine consecutive years (1999 – 2008), Papa John's has been rated number one n customer satisfaction among all national pizza chains in the American Customer Satisfaction Index (ACSI) released by the National Quality R esearch Center at the University of Michigan Business School. †¢Top rated national pizza delivery and take-out chain in Restaurants & Institutions' Consumers Choice in Chains Survey seven out of the last nine years (1998 – 2000, 2002 and 2004 – 2006). †¢Pizzamarketplace. com 2006 Pizza Chain of the Year †¢Voted ‘Best Pizza' in more than 50 U. S. markets over the last several years, including in Los Angeles, Washington D. C. , Atlanta, Dallas, Indianapolis, Orlando, Knoxville and Phoenix. †¢Highest rated national pizza delivery and take-out chain in RealPeopleRatings. com, an online quarterly rating site. Tied for first as the highest rated national pizza chain in the 2007 Zagat/Today Show Fast Food Survey. †¢Silver winner of the 2006 Brandweek Customer Loyalty Award in the pizza category. †¢Named Delivery Operator of the Year among pizza chains in the United Kingdom by the Pizza and Pasta Association (2005 – 2006). CHIEF COMPE TITORS: Papa John’s top chief competitors are Domino’s, Little Caesar’s, and Pizza Hut. FINANCIAL POSITION OF COMPANY (PAST AND PRESENT): †¢Fourth quarter earnings per diluted share of $0. 49 in 2009 vs. $0. 46 in 2008 and full-year earnings per diluted share of $2. 06 in 2009 vs. $1. 30 in 2008 †¢Fourth quarter earnings per diluted share, excluding noted items, were $0. 41 in 2009 vs. $0. 8 in 2008 and full-year earnings per diluted share, excluding noted items, were $1. 50 in 2009 vs. $1. 68 in 2008 †¢Domestic system-wide comparable sales decreased 0. 5% for the quarter and were even for the year †¢International franchise system sales increased 18% for the quarter (13% excluding the impact of foreign currency exchange rates) and 14% for the year (24% excluding the impact of foreign currency exchange rates) †¢11 net Papa John's worldwide unit openings during the quarter and 89 net openings during the year †¢Earnings guidance for 20 10 reaffirmed at a range of $1. 70 to $1. 90 per diluted share, excluding the impact of consolidating BIBPPapa John's International, Inc. (NASDAQ: PZZA) today announced revenues of $280. 5 million for the fourth quarter of 2009, compared to revenues of $279. 6 million in 2008. Net income for the fourth quarter of 2009 was $13. 7 million, or $0. 49 per diluted share (including after-tax income of $1. 3 million, or $0. 05 per diluted share, from the consolidation of the results of the franchisee-owned cheese purchasing company, BIBP Commodities, Inc. (â€Å"BIBP†), a variable interest entity, and a gain of $1. 0 million, or $0. 03 per diluted share, from the finalization of certain income tax issues), compared to 2008 fourth quarter net income of $12. 8 million, or $0. 6 per diluted share (including after-tax income of $600,000, or $0. 02 per diluted share, from the consolidation of BIBP, a gain of $1. 2 million, or $0. 04 per diluted share, from the finalization of certain inc ome tax issues and an after-tax charge of $2. 2 million, or $0. 08 per diluted share, related to restaurant impairment and disposition losses). Consolidated revenues for 2009 were $1. 11 billion, representing a decrease of 2. 3% from revenues of $1. 13 billion for 2008. Net income for 2009 was $57. 5 million, or $2. 06 per diluted share (including after-tax income of $14. 6 million, or $0. 52 per diluted share, from the consolidation of BIBP and a gain of $1. 0 million, or $0. 4 per diluted share, from the finalization of certain income tax issues), compared to net income of $36. 8 million, or $1. 30 per diluted share, for 2008 (including a net loss of $6. 9 million, or $0. 24 per diluted share, from the consolidation of BIBP, a gain of $1. 7 million or $0. 06 per diluted share from the finalization of certain income tax issues and an after-tax charge of $5. 5 million, or $0. 20 per diluted share, related to restaurant impairment and disposition losses). FRANCHISE OPPORTUNITIES: Cur rently Papa John’s has a 2010 U. S. Development Incentive Program for franchise opportunities. This program currently offers: †¢NO FRANCHISE FEE; A REDUCED ROYALTY RATE FOR THE FIRST 12 MONTHS FOR ON-TIME RESTAURANT OPENINGS, INCLUDING A 0% ROYALTY RATE FOR RESTAURANTS OPENED BY JUNE 2010; †¢A FREE â€Å"WOW OVEN† SET (UP TO $32,000 VALUE); AND †¢A CREDIT ON FOOD PURCHASES OF UP TO $3,000. If you do not qualify for the 2010 U. S. Development Incentive Program then these are the regular franchise requirements and fees: †¢Minimum of $50,000 in cash or liquid assets; †¢Minimum net worth of $150,000; and †¢Ability to obtain financing up to $200,000. Additional franchisee qualifications and requirements include: †¢The prospective franchisee should have at least one partner with a successful business management background and one partner who qualifies as the Principal Operator. For single-unit development, an individual can apply to be both owner and Principal Operator. The Principal Operator must have prior general management experience relative to the number of units to be developed and must own or have the right to acquire at least 5% equity in the business within 12 months of hire date. †¢A fully completed Request for Consideration Form and current resume must be submitted for each member of the proposed franchise group or the owner operator, including the proposed Principal Operator. Also, Papa John's will request supporting documentation from each proposed owner. Franchise Fees †¢The initial franchise fee is $25,000 per restaurant. ** Waived for 2010 †¢An ongoing royalty fee of 5% of net sales is due on a monthly basis. * Reduced for 2010 †¢Papa John's requires that a minimum of 7% of net monthly sales be spent by each franchisee for marketing purposes*, as follows: 2. 94% on national fund; and 4. 06% on co-op and/or local marketing initiatives. Also, $9,000 must be spent on grand opening adv ertising for each of the first two restaurants. Papa John's Franchise Offering Circular includes more detailed information regarding marketing and advertising fees. FUTURE PLANS: In an effort to further enhance its pan-India presence, the US-based delivery pizza restaurant chain, Papa John's is planning to open 10 more Papa John's outlets by the end of current quarter (April-June 2010). BIBLIOGRAPHY (1)Chris Sternberg: Papa John's International, Inc. (April 29, 2010).Papa John's Names Jude Thompson Co-CEO along with Founder and Chairman John Schnatter. http://ir. papajohns. com/releasedetail. cfm? ReleaseID=464972 (2)Papa John’s International. (2010). Retrieved April 18, 2010, from http://company. papajohns. com/about/pj_story. shtm (3)Franchise opportunities. (2010). Retrieved April 13, 2010, from, http://company. papajohns. com/franchise_opps/index. shtm (4)Financial overview. (2010). Retrieved on April 18, 2010, from, http://ir. papajohns. com/ (5)Financial information. (2 010). Retrieved on April 21, 2010, from, http://ir. papajohns. com/financials. cfm (6)Stock information. (2010). Retrieved on April 12, 2010, from, http://ir. papajohns. com/stockquote. cfm