“All you’ve got to do in life is find something you love and are good at.”
John Schnatter is the founder of Papa John’s Pizza. I was skimming my latest edition of Bloomberg Businessweek (edition June 11, 2017), and started reading my favorite section in the magazine: ‘How Did I Get Here?’ I was immediately interested to learn that Schnatter grew up in Jeffersonville, a small town in southern Indiana. My family, on my Dad’s side, is from New Albany, IN, which is right next door to Jeffersonville (or ‘Jeff’ as my Grandmother used to call it) – both towns are immediately across the the Ohio River from Louisville, KY.
According to Forbes, Schnatter is the grandson of German immigrants who came to the U.S. in 1867. His grandfather and father were entrepreneurs. His grandfather owned three successful businesses, while his father started 20 business that all faltered. Schnatter started working to earn money by cutting grass at 8 years old, and started painting gutters at 12 (starting to work for an income early is generally a sign of financial success later in life).
Jeffersonville, IN is a pretty small town. Not much appears to be happening there, at least the last time I was there, 5-6 years ago. In fact, one of Schnatter’s Life Lessons is: “If your business can be successful in Columbus, Louisville, or Evansville, you’ve probably got something you can franchise.” Presumably, he chooses these cities because of their relative size and the amount of business taking place in, and around, them.
So, Schnatter graduated from Ball State University in 1983 or 1984 with a degree in Business. Nothing remarkable there. But before he graduated from college, he may have discovered a secret to his future successes. While working as a dishwasher and pizza cook at Rocky’s Sub Pub from 1977-78, he discovered that he hated washing dishes! He also discovered that if he made the pizzas right, the plates would come back empty, but if he didn’t, they’d come back half-eaten. The lesson being, make really good pizza and you have to do less work!
After graduating from college, Schnatter helped out at his Dad’s bar, called ‘Mick’s Lounge II’, in Jeffersonville. His Dad’s bar had accumulated about $64k in debt so Schnatter sold his Camaro to cover the near-terms costs of the bar. According to Forbes, he settled the Bar’s debts in about 4 months.
He started making pizzas out of a broom closet in the bar and immediately went from making $300 a week, to $1500, then $3000 and then on to grossing over $100,000 a year in 14 months! The first Papa John’s was built next to his Dad’s Bar.
With the help of Schnatter’s brother, Chuck, a lawyer, they were able to sell 100 franchised restaurants between 1986 and 1991. Schnatter says he put his brother, Chuck, through college and law school, and in return he received free legal services. This ultimately resulted in Papa John’s having their franchise agreements created by the top law firm in Kentucky. This was probably another key ingredient in the franchise success of Papa John’s, I would guess.
“In 1991 I didn’t have $2,000 to go on vacation. In 1994 the company was worth $200 million.”
Papa John’s filed for IPO and went public in 1993 with 232 franchised stores. The company is listed on the NASDAQ as ‘PZZA’. In 2016, they did $1.7 billion in sales worldwide. So, roughly 10 years after graduating from Ball State with a degree in Business Administration, Schnatter finds himself at the helm of a publicly traded pizza company that would soon be doing almost $2 billion in top-line business each year!
“What gets measured gets done, and what gets rewarded gets repeated.”
According to a January 26, 2017 video posted on Business Insider:
- Peyton Manning owns 30 Papa John’s franchises in Denver, CO.
- Jerry Jones own 89 Papa John’s franchises in Dallas, Ft. Worth, Waco and Austin.
- Jerome Bettis owns 4 Papa John’s franchises in the Pittsburgh area.
- Jamal Mashburn owns 57 Papa John’s franchises across the U.S.
Forbes reports that Papa John’s currently has a market cap of $3.2 Billion, yet it has only captured about 1/10th of the Pizza Market currently dominated by Pizza Hut and Dominoes.
John Schnatter’s net worth is currently reported to be around $1 Billion.