Papa Johns 2008 Annual Report Download - page 4

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As my farmer friend out West likes to say, when you’re in the
restaurant business, it’s all about the food. Well, I am proud
to say that after 25 years, it’s still about the pizza –
a better pizza, that is – at Papa John’s. Our brand
promise of quality – our warranty, if you will – is
“Better Ingredients. Better Pizza.” and it is the
backbone of everything we do at Papa John’s.
In a world where the norm often seems to be skating on the edge,
we think there is a better way to do business – a straightforward,
high-integrity and win-win-win approach (where shareholders,
franchisees and Team Members all win). Through good economic
times or bad, our long-term approach of delivering superior-quality
pizza with world-class customer service continues to serve us well.
Financial highlights from 2008 include:
Consolidated revenues of $1.13 billion, representing an •
increase of 6.4% over 2007;
Domestic system-wide comparable sales increased 0.9% for •
the year, making Papa John’s the only national takeout and
delivery pizza company to report positive comp sales;
International franchise system sales increased by 26.1%; and•
172 net worldwide restaurant openings.•
We continue to spread our “Better Ingredients.
Better Pizza.” message throughout the world. In 2008, we
reached an important milestone – 500 international restaurants.
While it took us 10 years to open our fi rst 500 restaurants, it only
took us seven months to open the next 100, and today we have
a solid foundation to continue spreading our quality message
around the globe. Today, our international footprint includes:
More than 200 restaurants in Asia;•
Well over 100 restaurants each in Europe •
and Latin America; and
Nearly 100 restaurants in the Middle East.•
We also continue to leverage our industry-leading
consumer convenience technology, anchored by
our online ordering site, papajohns.com. Since
launching papajohns.com in 2001, our online sales have grown
exponentially, and last year we surpassed $1 billion in cumulative
online sales. We have continued to innovate convenience in
ordering for our customers, with upgrades and innovations
including:
Plan Ahead Ordering, allowing customers to place orders up •
to 21 days in advance;
“Repeat Last Order” function, replicating a customer’s most •
recent order with just one click;
“Favorites Wizard,” allowing customers to save their most •
frequent menu combinations; and
Most recently, the launch of SMS/text and mobile Web •
ordering.
The prosperity of our franchise and corporate
operators is paramount to the success of our entire
company. To that end, in late 2008 we announced an industry-
leading franchise support program to help our system during
these challenging times. These initiatives include:
Providing continued cheese cost relief to our system in 2009 •
by modifying the cheese pricing formula used by BIBP
Commodities, Inc.;
Providing additional system-wide national marketing support;•
Providing expanded targeted royalty relief and local •
marketing support for struggling franchisees or markets; and
Suspending collection of the 0.25% royalty rate increase •
scheduled for January 2009.
Our solid fi nancial position and conservative balance
sheet allow us to offer this comprehensive support
package to help our franchisees navigate through
these challenging times. When the economy rebounds and
consumer sentiment improves, we believe the real winners in our
category will be those brands that continued to invest in their
people, product and service through even the most trying
of times.
In 2008, the 350+ franchisees and 90,000+ Team Members in
the Papa John’s system throughout the world did a remarkable job
staying true to our brand promise in the face of unprecedented
economic and competitive pressures; to each of them, I sincerely
say “thank you.” And thanks to each of you for your continued
support and partnership. As we embark on our next 25 years
together, remember – it’s still about better pizza.
Founder Chairman and
Interim Chief Executive Offi cer
Dear
Shareholders,
Franchisees and
Team Members: