Papa Johns 2001 Annual Report Download - page 7

3
PART I
Item 1. Business
General
Papa John’s International, Inc. (referred to as the “Company”, “Papa John’s” or in the first person
notations of “we”, “us” and “our”) operates and franchises pizza delivery and carry-out restaurants under
the trademark “Papa John’s” domestically in 47 states, the District of Columbia and nine international
markets, and under the trademark “Perfect Pizza” in the United Kingdom. The first Company-owned Papa
John’s restaurant opened in 1985 and the first franchised restaurant opened in 1986. We acquired Perfect
Pizza Holdings Limited (referred to as “Perfect Pizza” and “Papa John’s UK”) in 1999 as part of our plan
to develop restaurants internationally (see Business - Expansion). At December 30, 2001, there were
2,729 Papa John’s restaurants in operation, consisting of 611 Company-owned and 2,118 franchised
restaurants. Additionally, there were 193 Perfect Pizza restaurants in operation, consisting of three
Company-owned and 190 franchised restaurants.
Strategy
Our goal is to build the strongest brand loyalty of all pizzerias internationally. To accomplish this goal,
we have developed a strategy designed to achieve high levels of customer satisfaction and repeat
business, as well as to establish recognition and acceptance of the Papa John’s brand. The key elements
of our strategy include:
Focused Menu. Papa John’s restaurants offer a focused menu of high-quality pizza, breadsticks and
cheesesticks. Papa John’s traditional crust pizza is prepared using fresh dough (never frozen), cheese
made from 100% real mozzarella, fresh-packed pizza sauce made from vine-ripened tomatoes (not from
concentrate) and a proprietary mix of savory spices, and a choice of high-quality meat and vegetable
toppings. Papa John’s thin crust pizza is made with a par-baked crust and the same high-quality toppings.
We believe our focused menu creates a strong identity in the marketplace, while also simplifying
operations at our restaurants.
Efficient Operating System. We believe our operating and distribution systems, restaurant layout and
designated delivery areas result in lower restaurant operating costs and improved food quality, and
promote superior customer service. Our Quality Control Center (“QC Centers”) system takes advantage
of volume purchasing of food and supplies, and provides consistency and efficiencies of scale in dough
production. This eliminates the need for each restaurant to order food from multiple vendors and commit
substantial labor and other resources to dough preparation. Because Papa John’s restaurants have a
focused menu and specialize in delivery and carry-out services, each team member can concentrate on a
well-defined function in preparing and delivering the customer’s order.
Commitment to Team Member Training and Development. We are committed to the development and
motivation of our team members through training programs, incentive compensation and opportunities for
advancement. Team member training programs are conducted for corporate team members, and offered
to our franchisees at training centers across the United States. We offer performance-based financial
incentives to restaurant team members at various levels. Our growth also provides significant
opportunities for advancement. We believe these factors create an entrepreneurial spirit throughout Papa
John’s, resulting in a positive work environment and motivated, customer-oriented team members.
Marketing. Our restaurant-level marketing programs target the delivery area of each restaurant, making
extensive use of targeted print materials in direct mail and store-to-door couponing. Local marketing
efforts also include a variety of community-oriented activities with schools, sports teams and other