Papa Johns 2002 Annual Report Download - page 4

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”. At December 29, 2002, the Company and its franchisees operated
domestically in 49 states, the District of Columbia and nine international markets, and under the
trademark “Perfect Pizza” in the United Kingdom. The number of international markets opened increased
to 11 through March 2003. 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 - Development). At December 29, 2002, there were 2,792 Papa John’s restaurants in
operation, consisting of 594 Company-owned and 2,198 franchised restaurants. Additionally, there were
144 franchised Perfect Pizza restaurants in operation.
All of our periodic report filings with the Securities and Exchange Commission (“SEC”) pursuant to
Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended, are available, free of
charge, through our web site located at www.papajohns.com, including our annual report on Form 10-K,
quarterly reports on Form 10-Q, and current reports on Form 8-K, and any amendments to those reports.
These reports are available through our website as soon as reasonably practicable after we electronically
file such reports or amendments with the SEC.
Strategy
Our goal is to build the strongest brand loyalty of all pizzerias internationally. The key elements of our
strategy include:
Limited Menu. Domestic Papa John’s restaurants offer a focused menu of high-quality pizza along with
limited side items, including breadsticks, cheesesticks, chicken strips and canned or bottled soft drinks.
Papa John’s traditional crust pizza is prepared using fresh dough (never frozen) and our thin crust pizza is
made with a prepared crust. Papa John’s pizzas are made from a proprietary blend of wheat flour, 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 (100% beef and
pork with no fillers) and vegetable toppings. Fresh onions, green peppers and baby portabella mushrooms
can be purchased from the QC Center system, which delivers twice weekly. Each traditional crust pizza is
served with a container of our special garlic sauce and two pepperoncinis, and each thin crust pizza is
served with a container of special seasonings and two pepperoncinis. Although we have added chicken
strips and will test products in certain situations, we continue to have a relatively small number of total
menu items. In international markets, the menu mix (toppings and side items) is adapted to local tastes.
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.
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