Papa Johns 2014 Annual Report Download - page 18

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sales to the Co-op for market-wide programs, such as television, radio, digital and print advertising, and
sports sponsorships. The rate of contribution and uses of the monies collected are determined by a
majority vote of the Co-op’s members. The contribution rate for Co-ops generally may not be below 2%
of sales without approval from Papa John’s.
The restaurant-level and Co-op marketing efforts are supported by media, print, digital and electronic
advertising materials that are produced by Papa John’s Marketing Fund, Inc. (“PJMF”). PJMF is an
unconsolidated nonstock corporation designed to operate at break-even for the purpose of designing and
administering advertising and promotional programs for all participating domestic restaurants. PJMF
produces and buys air time for Papa John’s national television commercials, buys digital media such as
banner advertising, paid search-engine advertising, mobile marketing, social media advertising and
marketing, and SMS text and email, in addition to other brand-building activities, such as consumer
research and public relations activities. Domestic Company-owned and franchised Papa John’s restaurants
are required to contribute a certain minimum percentage of sales to PJMF. The contribution rate to PJMF
can be increased above the required minimum contribution rate if approved by the governing board of
PJMF up to 4% of sales, and beyond those levels if approved by a supermajority of domestic restaurants.
The contribution rate has been 4% since 2011.
We provide both Company-owned and franchised restaurants with pre-approved marketing materials and
catalogs for the purchase of uniforms and promotional items. We also provide direct marketing services to
Company-owned and franchised restaurants using customer information gathered by our proprietary
point-of-sale technology (see “Company Operations – Domestic Point-of-Sale Technology”). In addition,
we provide database tools, templates and training for operators to facilitate local email marketing and text
messaging through our approved tools.
Our proprietary digital ordering platform allows customers to order online. Our eCommerce platforms
include “plan ahead ordering,” Spanish-language ordering capability, Google Wallet® alternative
payment and enhanced mobile web ordering for our customers, including Papa John's iPhone® and
Android® applications. Our Papa Rewards® program is an eCommerce customer loyalty program
designed to increase loyalty and frequency of consumer use of our eCommerce ordering platform. We
receive a percentage-based fee from U.S. franchisees for online sales, in addition to royalties, to defray
development and operating costs associated with our eCommerce ordering platform.
Our domestic restaurants offer customers the opportunity to purchase a reloadable gift card referred to as
the “Papa Card.” The Papa Card is sold as either a plastic gift card purchased in our restaurants, or an
online digital card. We sell Papa Cards to consumers on our website and through third-party retailers. We
also sell cards in bulk to business entities and organizations. We continue to explore other Papa Card
distribution opportunities. The Papa Card may be redeemed for delivery, carryout, and eCommerce orders
and is accepted at all Papa John’s traditional domestic restaurants.
In international markets, our marketing focuses on customers who live or work within a small radius of a
Papa John’s restaurant. Certain markets can effectively use television and radio as part of their marketing
strategies. The majority of the marketing efforts include using print materials such as flyers, newspaper
inserts, in-store marketing materials, and to a growing extent, digital marketing such as display, search
engine marketing, social media, mobile marketing, email, and SMS text. Local marketing efforts, such as
sponsoring or participating in community events, sporting events and school programs, are also used to
build customer awareness.
Company Operations
Domestic Restaurant Personnel. A typical Papa John’s Company-owned domestic restaurant employs a
restaurant manager and approximately 20 to 25 hourly team members, many of whom work part-time.