Papa John's was hemorrhaging stores and sales until activist investor Starboard Value took control, hired a new CEO from Arby's, and brought in Shaq as a franchisee and board member. Same-store sales jumped 20% during COVID as delivery exploded. Starboard cashed out its stake for $364 million.
The Papa John's pizza chain has been in a freefall over the past few years. Lawsuits going on with ownership, uh, 300 stores closing, and sales in a freefall, sometimes 10% in a quarter. Back in 2018, same-store sales were down over 11% that quarter alone. They were closing 54 stores. There were lawsuits going everywhere. The boardroom was chaos. Activist investor Starboard Value put $250 million into the company. They started to clean house. They brought in a new CEO, the guy who had turned around Arby's, fascinatingly, brought in Shaquille O'Neal as a franchisee, a board member, and spokesperson. And in fact, he even bought some franchises in Atlanta. And they offered $80 million to the franchisees to help them get their businesses turned around. Then, as is the case, if you have to ask yourself, would you rather be lucky or good? They got lucky. And in their case, COVID was a godsend. Same-store sales for Papa John's went up 20%. Delivery was a hit. And these guys, because the stock went up so much, were able to take their $250 million investment and cash out quickly for $364 million. But the luck was good. But if you look at what really happened, they just made some good business decisions. They got out a CEO and founder who couldn't stop running his mouth. They turned around the brand and they went back to more of what really mattered, which was how do we make decent pizza? I did a long-form video on the rise and fall of Papa John's. If you wanna see it, there's a link in the comments below. Catch you next time.
