Papa Johns 2006 Annual Report Download - page 5

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We have offered a thin crust pizza since 1999. In 2005, we introduced Papa’s Perfect Pan Pizza, which
features a square, thick buttery-tasting crust made with olive oil, and a zesty robusto pizza sauce with
chunks of tomato and flavored with garlic, Italian herbs and spices. Both the thin and pan crusts are par-
baked products produced by third-party vendors. Each traditional crust and pan pizza offers a container
of our special garlic sauce and a pepperoncini pepper. Each thin crust pizza is served with a packet of
special seasonings and a pepperoncini pepper. 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 domestic QC Center system takes advantage of volume
purchasing of food and supplies, and provides consistency and efficiencies of scale in fresh 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 advancement. Team member training programs are conducted for corporate team members, and
offered to our franchisees at training locations across the United States and internationally. We offer
performance-based financial incentives to corporate and restaurant team members at various levels. Our
management compensation program is designed to attract and retain highly motivated people.
Marketing. Our marketing strategy consists of both national and local components. Our domestic national
strategy includes national advertising on television and via the internet. Seven national television
campaigns aired in 2006. Our local restaurant-level marketing programs target consumers within the
delivery area of each restaurant, extensively using print materials including targeted direct mail and
store-to-door couponing. Local marketing efforts also include a variety of community-oriented activities
within schools, sports venues and other organizations. Local marketing efforts are supplemented with
radio and television advertising, produced both locally and on a national basis. Additionally, we have
developed joint cross-marketing plans with certain third-party companies. For example, we entered into a
five-year marketing and partnership agreement with Six Flags theme parks, which provides for cross-
marketing activities. We will continue to explore additional cross-marketing opportunities with third-
party companies. In the international markets, our marketing strategy consists of targeting 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 and in-store marketing materials. Local marketing
efforts such as sponsoring or participating in community events, sporting events and school programs are
also used to build customer awareness.
Franchise System. We are committed to maintaining and developing a strong franchise system by
attracting experienced operators, partnering with them to expand and grow their business and monitoring
their compliance with our high standards. We seek to attract franchisees with experience in restaurant or
retail operations and with the financial resources and management capability to open single or multiple
locations. To ensure consistent food quality, each domestic franchisee is required to purchase dough and
seasoned sauce from our QC Centers and to purchase all other supplies from our QC Centers or approved
suppliers. QC Centers outside the U.S. or in remote areas may be operated by franchisees pursuant to
license agreements or by other third parties. We devote significant resources to provide Papa John’s
franchisees with assistance in restaurant operations, management training, team member training,
marketing, site selection and restaurant design. We also provide significant assistance to licensed
international QC Centers in sourcing high-quality suppliers located in-country or regional suppliers to the
extent possible.