Papa John’s Pizza

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Papa John’s Pizza Papa John’s Pizza is the third largest take-out and delivery pizza restaurant chain in the United States, right behind Pizza Hut and Domino’s pizza (see figure 1). Their slogan is, “Better Ingredients, Better Pizza, Papa John’s.” Internationally, there are over 4,000 Papa John’s establishments including 2,600 in the U.S. and the remainder spread among 32 other countries. Papa John’s restaurant was established in 1984 by John Schnatter and is a publically traded company, with 30% of its shares owned by John Schnatter. With Papa John’s being a franchise, the store owners pay a royalty fee of 5% of net sales to Papa John’s International and up to 7% of net sales on advertising efforts. With there being so many Papa John’s around the world the company runs the risk of inconsistency throughout their stores. To help avoid this potential problem, corporate operations oversee all franchisees to ensure brand consistency. Figure [ 1 ] To remain competitive in the industry, it is essential for companies to be able to adopt not only to the market but to technology as well. Papa John’s took this strategy into consideration in January 2002, when they became the first national pizza chain to make online ordering available to all of its U.S. customers. By taking the first mover approach Papa John’s was able to capture a larger market size while their competitors rushed to catch up. After researching Papa John’s further, I concluded that there are several risks and opportunities currently facing the company. I believe that the pizza market is somewhat saturated. Take for example Bend; there are dozens of pizza parlors all around the area and only more are showing up. The barriers to entry for this specific market are somewhat low, and it can be difficult for existing companies to keep their market share (see figure 2). Also some additional challenges

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