Timothy C. O’Hern, Papa John’s president of international and chief development officer, informed the company on September 5 he plans to retire, effective immediately, according to a Securities and Exchange Commission filing. O’Hern, who started with the pizza chain in 1995, will remain a Papa John’s franchisee, owning and operating nine U.S. locations. He’s been a franchisee since 1993 and became construction manager in 1995. O’Hern worked as CDO from 2012 until May of this year, when he took on international duties.
Papa John’s said existing team members would “fulfill the duties previously overseen by Mr. O’Hern.” Specifically, Joe Smith, senior vice president and chief financial officer, will oversee the development and global sales functions while reporting to president and CEO Steve Ritchie. “Mr. Smith has significant experience and expertise in this capacity having previously served as the company’s Senior Vice President, Global Sales, and Development from 2016 to April 2018 and as Vice President, Global Sales, and Development from 2010 to 2016,” the company said. Smith was promoted to CFO in April. Before joining Papa John’s, Smith served as corporate controller for United Catalysts, Inc. and began his career with Ernst & Young.
Jack Swaysland, who has worked as chief operating officer of international since May 2018, will assume full responsibility of the international business.
While Papa John’s North America same-store sales dropped 6.1 percent in the second quarter, its international comps fell 0.8 percent versus a 3.9 percent lift in the prior-year period. And its total international sales lifted 12.2 percent, driven by unit growth. Comps are down 0.3 percent internationally for the trailing six months against last year’s 4.9 percent increase for the same period.
As of July 1, there were 1,840 international Papa John’s locations and 3,407 North American stores. Growth wise, the chain has added 82 international restaurants year-to-date. Its North American footprint has shrunk by 34 restaurants.
Papa John’s did not provide a reason for O’Hern’s abrupt departure, but the move arrives during a rocky time for the brand. In an article published by Forbes, O’Hern was described as a close friend of ousted founder John Schnatter from Jeffersonville High School, and one of the employees that fostered a toxic “bro” culture. The article alleged that O’Hern, who served as vice president from his 1995 hire, was asked to leave Papa John’s in the mid-2000s for mistreating employees, according to a former senior executive. He denied the claim and said he was not asked to leave, although O’Hern did acknowledge that an investigation was conducted around the time he left. He also confirmed a close relationship with Schnatter. Per the article, O’Hern returned to Papa John’s in 2009 and became a “hench guy” for Schnatter.
“Either way, after returning to Papa John’s in 2009, O’Hern became a central figure in the Schnatter orbit,” the article wrote.
Schnatter, since stepping down as chairman on July 11 following a report he used a racial slur during a conference call, has expressed regret over the decision and even sued the company he holds a 31 percent stake in.
In August, he accused the company of “serious misconduct” in a scathing letter to franchisees. This shortly after Papa John’s announced its leadership team completed “unconscious bias training,” and planned to roll out the program across the country, and that an independent cultural audit and investigation of its diversity and inclusion practices is also underway, “with actionable recommendations to follow.”
Papa John’s also fired back at Schnatter’s claims with a letter of its own, saying (among other things) that Schnatter “is promoting his self-interest at the expense of all others in an attempt to regain control,” and that “John Schnatter is harming the company, not helping it, as evidenced by the negative impact his comments and actions have had on our business and that of our franchisees.”