The founder of Papa John's, John Schnatter, began his pizza career as a high school student at Rocky's Pizza and Subs in Jeffersonville, Indiana. He continued this while in college, working as a delivery driver. Upon graduating, he began working for his father, who was co-owner of the bar "Mick's Lounge" in Louisville. In 1984, he sold his car to buy out the other owner of the bar, knocked out a broom closet and started serving pizza to customers. Business started picking up, and soon enough Mick's Lounge was converted entirely into the first Papa John's restaurant.
The company credits it's growth to attention to quality and menu simplicity, contrasting that with other chains' focus on low prices and menu options. Pizzas failing to garner an eight on a ten point scale are discarded. Fewer options in crust styles and side dishes simplify inventory management and are meant to allow greater focus on what options there are. To further simplify in store operations and to provide product consistancy between stores, many functions such as dough production are carried out by an off store commisary system.
Despite its success, Papa John's has had its share of difficulties. In 1997, Pizza Hut sued Papa John's over its "Better Ingredients, Better Pizza" slogan, based on a series of ads that compared the ingredients of Papa John's and its competitors. At trial, the court agreed with Pizza Hut's claims that Papa Johns slogan did not constitute statements of literal fact. In other words, the district court agreed with Pizza Hut's argument that "fresher ingredients" do not necessarily account for a "better" pizza. (Interestingly, Papa Johns did indeed prove in court that it uses fresher ingredients). This was overturned in court in 1999 when Papa John's appealed the decision.
The structure of a Papa John's restaurant is the typical one seen in many fast food outlets, with a salaried Store Manager presiding over day-to-day operations, with several salaried or hourly Assistant Managers and Shift Managers presiding over In-Store and Delivery team members. Above the store management is a senior Store Manager, who reports to an area superviser, who is generally supervised by a Market Director or Operational Owner.
Franchise stores can be bought and pay a certain percentage of sales to Papa John's International, a portion of which are used for advertising and support. Corporate operations looks over franchisees to ensure brand consistency.
As of January 26, 2003, there were 2,787 Papa John's restaurants (591 company-owned and 2,196 franchised) operating in 49 states and nine international markets. Papa John's International is a publicly traded company (Nasdaq: PZZA), with 30% of shares being owned by John Schnatter.