Papa Johns 2000 Annual Report Download - page 3

his past year brought a few accomplishments worth noting for Team Papa John’s:
▲369 restaurant openings (we ended the year with 2,817 restaurants in 49 states and
10 international markets, including 205 Perfect Pizza restaurants in the United Kingdom);
▲2.3% positive comp sales (against an industry leading per store average);
▲17% revenue growth;
▲We successfully defended our “Better Ingredients. Better Pizza.” slogan
(challenged by our largest rival) all the way to the United States Supreme Court; and
▲We officially passed Little Caesar’s to become the third largest pizza company in the world.
Most importantly, pizza eaters across the country continued to reward our commitment to “Better Ingredients. Better Pizza.”
As reported in The Wall Street Journal in February 2001, Papa John’s (for the second straight year) has been rated number one in
customer satisfaction among all national fast food restaurants in the American Customer Satisfaction Index. Not only did we finish
well above the average for all national fast food chains, we finished seven percentage points higher than our closest pizza
competitor! I’m proud of our team for continuing to win where winning matters most – in product quality and taste.
The pizza business is extremely competitive right now. In fact, I can’t remember a time when its been more competitive since
we started Papa John’s out of the back of my dad’s tavern 16 years ago. Price discounting, a tight labor market and some slowing in
the pizza category have all combined over the last 18 months or so to make it real competitive out there. The fact that we’re gaining
significant market share in this difficult environment is testimony to the strength of the Papa John’s concept and our people.
Greetings to our Shareholders,
Team Members and Franchise Family
Moving forward, I think we can do a better job running our company. In 2000, our capital spending and general and
administrative (“G&A”) costs were higher than they needed to be. We got a little off focus. As big companies have a tendency
to do, we may have gotten a little complacent, i.e., our success made us “fat and happy.” There’s no room for that mindset in
this business. We have to stay lean and mean and work our business every day, 364 days a year (we’re closed on Christmas). Led
by a new senior management team, I believe our system is now focused more than ever on doing what we do best: making the
best-tasting, highest-quality pizza in the business, while providing great value to the customer.
To help our restaurant-level folks stay focused on running great restaurants, our senior management team has established
three main priorities for 2001:
▲Improve our unit economics/restaurant profitability;
▲Reduce our G&A/corporate spending; and
▲Drive sales and increase market share (through operational excellence, ongoing quality improvements and effective
marketing initiatives).
The concept is a horse. It’s our job at corporate not to slow the horse down with excess weight. We have to always make sure she’s
in the best condition to run her top race.
No one can predict the future. There will always be uncertainties and opportunities to overcome along the way. What makes
Papa John’s unique is our culture of excellence that allows us to face adversity head-on. Our team-oriented, quality-focused culture
characterizes who we are as a company and serves to guide each individual within the company. Our team members and franchise
family are proud of the fact that they work for a company where quality matters. They know that their individual efforts can turn
legendary customer service and superior-quality products from vision to reality. It is this commitment to excellence that produces
both a unified and focused organization and gives us a strategic advantage over the competition.
Remember, it took us 16 years to become the #3 pizza chain in the world; it could very well take us another 16 to become #1.
As we move forward, you have my commitment to keep Papa John’s on strategy: as long as my name is on the box, we won’t waiver
on our commitment to quality. We will continue to build upon our foundation of excellence, no matter how long it takes, until
Papa John’s is the number one pizza brand in the world. We’re in this game for the long haul. We hope you are too!
Sincerely,
John H. Schnatter
Founder, Chairman and
Chief Executive Officer