Papa Johns to keep staff in Louisville despite corporate headquarters sale. What to know

A previous version of this story incorrectly stated who former Papa Johns CEO John Schnatter criticized. He criticized NFL leadership's handling of player protests during the national anthem.

In early February, Papa Johns announced it will be selling its Louisville corporate headquarters office at 2002 Papa Johns Blvd.

The company cited a change in workforce needs as the reason to sell off the building, which has 140,000 square feet of office space. Despite the loss of permanent real estate in the city, the company ensures employees will still physically work in Louisville, with the hopes of adding more jobs in the metro area soon.

"Since returning to the office, we have, like other companies, been engaging with team members to figure out what is this new normal that some of us are still building and what works best for team members to support their particular functions …  And a physical location has a role to play," company spokesperson Harrison Sheffield told the Courier Journal.

Sheffield said the company will "most assuredly have a physical hub in Louisville," and is planning to lease office space, ideally, within the building they are selling, to maintain employees in the metro area.

"It's important that we note putting our Louisville campus up for sale is in no way related to our future plans or business performance," Sheffield said. "We have such a big presence in the Midwest … so a place like Louisville is critical from a distribution standpoint."

The company is keeping its IT, supply chain, legal, and finance shared services teams in Louisville. In 2020, Papa Johns announced it would be moving its global headquarters to Atlanta, noting the city was home to its largest corporate-owned restaurant market. The company also leases the Atlanta location at Three Ballpark Center at The Battery Atlanta, which opened in 2021.

"It’s not unusual for us to have more leasing agreements on our larger properties than ownership of them," Sheffield said.

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The company had been operating out of its current location in Jeffersontown since 1999. According to previous Courier Journal reports, the company incurred no debt when originally building the corporate office near Blankenbaker Parkway.

"Louisville retained hundreds of jobs and, as the evolution of remote work continues, we see another employer reconsidering [its] real estate footprint to better match the needs of a changing work environment," said Ben Moore, director of economic development at Louisville Forward.

On Feb. 23, Papa Johns will host its quarterly earnings conference call. Sheffield said the company cannot discuss whether it will be opening or closing restaurant locations, stocks and revenue plans, or other specific financial details until after this call.

As Papa Johns says it is still committed to the Louisville community after over 40 years, here is what we know.

What is the history of Papa Johns in Louisville?

Papa Johns was founded in 1984 in Jeffersonville, Indiana by John Schnatter. By 1986, the company was up to nine franchise locations, according to John Schnatter’s website.

Ten years after the company was founded, there were 500 Papa Johns chains open nationwide. In 1999, when the company moved into its Louisville corporate headquarters, Papa Johns celebrated restaurant number 2,000 opening.

There are more than 5,500 Papa Johns locations in operation worldwide, according to the company’s Securities and Exchange filing from September 2022.

In 2018, Schnatter stepped down as the CEO of the company following criticism of NFL leadership for its handling of player protests during the national anthem. At the time, Schnatter publicly blamed the NFL's handling of the situation as the reason for a decline in pizza sales. A few months later, Schnatter would also resign from his position as chairman of Papa Johns after admitting to using a racial slur. He also resigned from the University of Louisville's board of trustees.

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In July 2018, the University of Louisville removed Papa Johns as the title sponsor for Cardinal Stadium. The stadium remained without a sponsor until last month when L&N Federal Credit Union signed a 20-year, $41.3 million naming rights deal with the university.

In September 2020, the pizza giant announced it would be moving the company’s global headquarters to Atlanta. At the time, the company said about 550 of its 750 corporate jobs would remain in Kentucky. Today, there are nearly 600 corporate jobs left in Louisville and the company is currently hiring for at least 35 more positions in Louisville, Sheffield said.

During the pandemic, former CEO and chairman, Schnatter pledged to donate $1 million to small businesses for COVID relief through the John H. Schnatter Family Foundation.

In 2021, Papa Johns rebranded and removed the apostrophe from the company name, another step in moving away from company founder Schnatter.

What is Papa Johns' ongoing commitment to Louisville?

While Papa Johns is selling its corporate headquarters, the company claims a strong commitment to its hometown of Louisville.

"Some of the most exciting work going on at Papa Johns is happening out of our corporate hub in Louisville," Sheffield said.

Sheffield said this ongoing commitment to Derby City is most visible through the Papa Johns Foundation, a nonprofit focused on "building community." The Papa Johns Foundation, which launched in 2019, supports Greater Louisville Inc., the metro area chamber of commerce.

"The Papa John’s Foundation has significantly contributed to GLI’s programming and been a driving force in bringing our [diversity, equity, and inclusion] work to life," Olivia Sievert, the senior director of communications and public relations told the Courier Journal.

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According to an IRS 990 form filed in 2020, the Papa Johns Foundation contributed $50,000 to GLI and $25,000 to the Community Foundation of Louisville.

Sievert notes the foundation was "an early funder" of GLI's inclusion efforts in its five-year strategic plan for Louisville.

"The Papa John's Foundation … continues to fund our Power to Prosper Minority Business Accelerator. Because of their generosity, we have been able to provide the Power to Prosper Accelerator, which is valued at $15,000 per participant, free of charge to growing minority-owned businesses," Sievert said.

Since the start of the accelerator in 2021, GLI has graduated 24 businesses.

According to information provided by Papa Johns to the Courier Journal, the company has invested $300,000 in local community organizations since 2020. These organizations include GLI, Boys and Girls Club of Kentuckiana, University of Louisville, Dare to Care, Kentucky Harvest, Junior Achievement Biztown, and Home of the Innocents.

"If we were trying to sneakily move out of Louisville, we're probably not doing a very good job of it," Sheffield said. "Some of that engagement with the community has actually increased over the past few years as our business has grown and our overall company has transformed itself."

What is Papa Johns' business outlook?

In early 2020, Papa Johns saw massive sales spikes, namely due to the stay-at-home orders issued for the pandemic. Across its North American stores, Papa Johns saw a nearly 18% sales increase for all of 2020. But by early 2021, the pizza company saw its sales decrease and its stock drop.

One year ago, Papa Johns stock closed at $114.27 per share. On Friday, Feb. 17, the stock was $96.78 per share, more than a 15% decrease in value.

Sheffield noted that since the announcement of selling the Louisville corporate campus headquarters, there has been no change in the corporate team composition.

"Any change in Louisville is not related to stock prices," he said.

On Feb. 6, Max Wetzel, executive vice president and chief operating officer of Papa Johns, based in Atlanta announced his intention to resign from his position on March 17, according to a Securities and Exchange filing. On Feb. 16, a Papa Johns Board of Directors member, Olivia Kirtley, based in Louisville, announced her retirement from the board after nearly 20 years.

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What is the future impact on the Louisville economy?

Over the years, Louisville has been home to several large corporations' headquarters such as Humana, Yum! Brands, UPS Airlines, and more. Others, such as Brown and Williamson Tobacco, which left Louisville in 2004, and L&N Railroad which left Louisville in 1980, came to Louisville as major headquarters, but eventually left the city due to consolidation and company sales.

And while Papa Johns, has insisted that the Louisville-based employees will remain in the city and work a hybrid model from a leased office space, potentially in the current corporate headquarters office, the decrease of the real estate footprint could serve as an indicator to other businesses looking to move.

"Anytime a city loses a corporate headquarters, especially one that is publicly traded, there is an economic impact," said Uric Dufrene, the Sanders Chair in Business at Indiana University Southeast. "The extent of the impact relates to the specifics of the deal. In the Papa Johns situation, there is an adverse impact, but this is minimized due to the remaining presence of the company."

In the long-term economic health of Louisville, this move by Papa Johns could damper the attractiveness of the city to other publicly traded corporations looking for a hometown, even when the reduction in workforce isn't significant, Dufrene said.

"... Generally speaking, the costs of losing a corporate headquarters exceed the benefits of retaining," Dufrene said.

Reporter Matt Glowicki contributed to this report. Contact reporter Olivia Evans at oevans@courier-journal.com or on Twitter at @oliviamevans

This article originally appeared on Louisville Courier Journal: Papa Johns to keep workers in Louisville after selling corporate HQ