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00:02:46.000Been an admirer of your company for quite some time and uh, look forward to diving into it.
00:02:51.000So I guess the first question is, a lot of our audience um, remembered some drama or controversy uh, regarding your uh departure from PAPA John's.
00:03:02.000Walk us through what happened there and kind of some how it ties to some of the trends we're seeing in our country still today.
00:03:08.000Well, I think you go back to it started in the earnings call Back in November 17, where I criticized leadership, Roger Goodell in particular, about not solving the situation to the owners' employers' satisfaction.
00:03:23.000And that Roger didn't like us calling him out, telling him to get his act together and fix the problem.
00:03:32.000So he had a friend that actually, coincidentally, owned an agency that was representing Papa John's, a gentleman named Casey Washerman.
00:03:41.000Casey was referred to Roger as his big brother.
00:03:48.000So Roger Goodell used Casey Washerman, as kind of one of his hitmen, his cronies, to kind of paint a false narrative in a false light on me being a racist on something that I really didn't say.
00:04:32.000Well, whether the board was actively or passively complicit, it's unequivocal that Laundry Service, the agency that we paid millions of dollars to enhance the reputation of not only the brand, but myself, maliciously tried to get me to say something that could hurt me and set me up.
00:04:55.000The board of directors of Papa John's, whether they were weak, they panicked, they couldn't take the heat, didn't do a proper investigation, violated Delaware law, and overreacted and did tremendous damage to the board, to the franchisees, to the suppliers, and to the company by not following a proper protocol.
00:05:18.000So Goodell was the kind of puppet leader here.
00:05:23.000Washerman, who owned Laundry Service, his CEO, Jason Stein, who's the CEO of Laundry Service, they were kind of the cronies.
00:05:31.000They were the puppets to do the dirty work.
00:05:33.000And unfortunately, at the time, I had a very weak board.
00:05:37.000They went sorry on me, went sorry on the situation, and they overreacted and did a tremendous amount of damage to the employees and to the franchisees.
00:05:49.000Do you regret resigning when this coup was kind of posed in front of you?
00:05:54.000Well, I resigned as the chairman to kind of help the board out and settle the situation down.
00:06:03.000One of the directors, Sonia Medea, said, Thank God you did what you did because you saved the company.
00:06:09.000So I was acting in the best interest of the board, the brand, the franchisees, Papa John's International, but I didn't know that we had a few board of directors that were working with Goodell and Washington to try to get rid of me because they wanted to run the company.
00:06:29.000They wanted me out so they could run the company.
00:06:51.000You always have to fight for what's right.
00:06:55.000And you look at the position they put me in.
00:06:57.000You have a board of directors, of which two, the CEO, Steve Ritchie, and the head of governance, Mark Shapiro, they wanted to run Papa John's.
00:07:06.000And at the time, Papa John's EBITDA was over $200 million a year.
00:07:10.000But when you're making that kind of money, people get greedy.
00:07:13.000And Shapiro and Stephen Ritchie work hand in glove with Jason Stein, the CEO of Laundry Service, per Washerman's direction to find a way to get me to say something or to do anything.
00:07:29.000They really couldn't find anything in the tape that I said because everything I said, the tape was anti-racist.
00:07:36.000It was the way I was raised: that you treat everybody with respect and kindness.
00:07:41.000Problem is, they taped it, reversed the meaning and the intent, took it out of context, took it out of contrast, and went to Forbes.
00:07:50.000Forbes wrote part of what I said, but not the whole thing.
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00:10:10.000And I feel very lucky that we had somebody turn in that tape so that we have evidence and proof that, in fact, Roger Goodell with his henchman, his crony, Casey Washman, set me up and painted me in a false light as a racist.
00:10:27.000What's amazing is we paid Washman millions of dollars to do just the opposite of what they did.
00:10:33.000Can you imagine hiring an agency, a purveyor, a supplier, and you're paying them millions of dollars and they're kind of going behind the scenes to undermine the face, the namesake, you know, that's synonymous with the success in the brand, not only in NFL, but, you know, throughout the country.
00:10:52.000As far as coming back, the first 20 months, I wanted to come back because the product quality had gotten so bad.
00:11:01.000And running the business on the fundamentals every day is like working out.
00:11:08.000It's very difficult, very arduous, very hard work.
00:11:11.000And once those fundamentals slip, it takes a year, year and a half to get the system to get back in shape.
00:11:23.000They did do one thing that was really beneficial to the company, and they fired Steve Ritchie, who was the interim CEO in 1718 when the stock went back to, I think, as low as $28.
00:11:37.000So when I left in 2016, the stock was almost 90.
00:11:45.000Mr. Ritchie and his team took it down to below 40.
00:11:49.000And then COVID came along first of 19 and really saved that company with people being trapped at home with a captive audience and also people having free money to spend and stay at home and order online and Amazon and Papa John's and you know Grubhub, et cetera.
00:12:09.000So right now, to answer your question, franchisees are doing well.
00:13:42.000You could do high volume of sales and make good margins and bring friends and family together.
00:13:47.000So I felt really good about the pizza business, and it was, you know, my first love.
00:13:51.000Yeah, so tell us kind of just the story of scaling, though, right?
00:13:55.000Outside of starting with one location and a couple, you know, when did you decide to either take outside money, invest your money, borrow money, or did you never?
00:14:03.000Were you just always cash flow positive and you had more money than you knew what to do with?
00:14:07.000Every entrepreneur has that moment where you had to decide: do I want to be a local phenomenon or do I want to really grow?
00:14:13.000Well, the Lexington, Columbus, Ohio, Louisville corridor is all about franchising.
00:14:19.000If you look at the magnitude of franchise that was the genesis was in that part of the country, Long John Silver's rallies, Chi Chi's, Donatos, White Castle, Bob Evans, Texas Roadhouse, Papa John, Kentucky Fried Chicken, the list, Jerry's restaurants.
00:16:20.000So the way I motivate him is I kind of get him a little angry.
00:16:23.000Two years ago, the product quality was really bad.
00:16:26.000And the way to get his Napoleon complex to kick in is to challenge him and point that out.
00:16:31.000Now, the last six months, the product quality has actually gotten a little bit better than it was, but it's not consistent.
00:16:42.000And incongruity in our business breeds mistrust.
00:16:46.000As Ray Croc said, your quality is only as good as your consistency.
00:16:50.000So moving forward, I think Rob Lynch's two biggest issues are: if that cheese goes to 230, 240 a pound, and those comp sales go to negative, he knows, A, I'm going to be breathing down his back.
00:17:06.000And C, that's going to be $100 stock, which got to understand in 2016, we're at 89.
00:17:12.000So, what, 11% increase in almost five, five and a half years?
00:17:17.000And the second issue he's got is the franchisees at Papa John's, love them to death.
00:17:23.000Yeah, it's kind of like trying to manage a wolf holding its ears.
00:17:30.000It's, you know, you can kind of do it from time to time a little bit, but just the slightest little mistake and they will turn around and bite you.
00:17:39.000So he's got a very, very tough job ahead.
00:19:27.000Um, and the stock price, I think, is near record highs, if not if not there.
00:19:32.000So, we were in, we were in default of our loans December of 18.
00:19:37.000That's how bad, that's how close this was to me getting back in charge and getting a hold of it.
00:19:42.000That's why Jeff Smith got such a sweet deal.
00:19:46.000But in all fairness, um, you know, I can handle three capacities right now, really four.
00:19:51.000I mean, I can be Papa John anytime I want to be Papa John because I'm Papa John right now at 130 bucks a share with a really tough labor market, supply chain issues, the political divide in our country.
00:20:05.000I don't want to be Papa John right now.
00:20:27.000Well, we'll talk more about this, but with the government printing money, that system makes the super rich super richer.
00:20:38.000That's right, two trillion or three trillion or four trillion to get ready to pump into the market.
00:20:43.000It's just going to help the ultra-rich get richer.
00:20:46.000And it breaks my heart because it hurts the middle class.
00:20:49.000So, the place you want to be right now is be a shareholder and enjoy that ride, let the dust settle with the supply chain, the labor market, and then we'll see down the road if and when I want to get back involved with the mothership, Papa John's.
00:21:03.000Well, there's a uh, I think they're going to need you at some point because you have just pinpointed some of the big issues regarding the Papa John model.
00:21:12.000So, I'm curious: in Papa John's, what percentage are corporate-owned versus franchise?
00:21:38.000Yeah, and so therefore, you're very dependent on all these different personalities, geographic changes, and shifts.
00:21:46.000How many of your franchisees own multiple locations?
00:21:50.000Well, that was one of the reasons I called Goodell out is Papa John's at the time was a company of small business owners, and they were giving me a lot of heat that hey, you know, the NFL is our biggest spend, and they're actually hurting our sales.
00:22:05.000When NFL season started up back in 16 and 17, we expected sales to go up, it actually went backwards.
00:22:12.000And so, the NFL property, which was once a great asset, the Papa John small business owner became a liability.
00:22:21.000I.e., that's why I had to call Goodell out and get it resolved.
00:22:26.000Now, a couple of the owners called me.
00:22:28.000They wanted to get rid of Goodell for other reasons.
00:22:32.000And I refused to get in the middle of that situation because Goodell didn't work for me.
00:22:38.000If they want to fire him, they're the owners.
00:23:11.000And again, I think Goodell has been on the hit list for several of the owners for some time.
00:23:20.000When the two of the owners called me, Jerry Jones with the Cowboys and Dan Snyder with the Redskins, the night before the earnings call, they said, you know, Goodell's got to go.
00:23:30.000You got to help us get rid of Roger Goodell.
00:23:40.000And I said, hey, listen, fellas, the guy works for you.
00:23:43.000I don't really want to get in the middle of your all's little personal battle.
00:23:47.000I just want the problem resolved to the owners and players' satisfaction.
00:23:51.000Unbeknownst to me, to your question, is Papa John's was the number one sponsor by far with revealance, likability, association.
00:24:04.000So now you've got two of the most powerful owners hammering on Goodell to get rid of him, and you got the number one sponsor hammering on Goodell to fix the problem.
00:24:13.000So, you know, Rogers, I'm always when you disagree with him or you come at him, he destroys you.
00:24:19.000He did it with trying to do with John Gruden, did it with Jerry Richardson.
00:24:23.000That's just his pattern that you can't question what he's doing.
00:24:25.000And if you call him out, and in this case, he used Casey Washerman as the hitman to hurt me and to set me up.
00:24:32.000And unfortunately, I had a weak board and went along with it.
00:24:38.000You mentioned this, some of the dynamics of growing and scaling the company.
00:24:42.000The good news is Papa John's is already established and it's already a brand and it already has many generations of brand trust and of infrastructure and all sorts of different things.
00:24:56.000Would you be able to start Papa John's in the current economic climate that we see today?
00:25:16.000So in what, four or five years, six years, we've grown 400 restaurants.
00:25:21.000So the momentum and the product quality and the point of differentiation and the better ingredients, better pizza promise, they've diluted that a lot.
00:25:30.000And it's showing up and they lost the ACSI two years in a row.
00:25:34.000We haven't, that's never happened since when I was running the company.
00:25:38.000It didn't happen at all, but since we founded the company, we're not growing restaurants.
00:25:43.000Last quarter, with all the goodness with COVID lockdowns and stem list packages and cheese being cheap, we closed 48 restaurants last quarter.
00:25:55.000And those are all franchisees or corporate?
00:25:57.000Franchisees, maybe one or two corporate, but mostly franchisees.
00:26:00.000And the entrepreneur, you know, he walks with his pocketbook.
00:26:04.000So I think what you have at Papa John's, you have a group that are real successful, a group that are hanging on, and you've got a big part of the franchise system that's very unhealthy that's kind of getting hidden or not getting called out because of the law of averages.
00:26:20.000The comp sales look good on averages because the really good ones are doing well and the really poor ones are not doing so well.
00:26:28.000And if this does take a turn, i.e., comps turn negative and cheese goes to 250 a pound, the dynamics of this whole thing changes.
00:27:39.000Every device, I have those beautiful three letters, VPN with a rectangle around it.
00:27:45.000It's rated number one by CNET and tech radar.
00:27:48.000Here's the cool thing: it works on phones, laptops, and even routers.
00:27:52.000So everyone who shares your Wi-Fi can be protected.
00:27:56.000Here's the thing: I have it on my iPhone, I have it on my iPad, I have it on my computer.
00:28:01.000Express VPN for me has been a game changer to be able to know that the tech companies or the government have to go through a whole other barrier to try to spy on us.
00:28:13.000And we see with the new announcements out of DC, if you spoke at a school board meeting lately, you better get a VPN.
00:28:18.000Secure your online activity by visiting expressvpn.com/slash Charlie today.
00:29:27.000Papa John's, and this is not to my liking, and I disagree with this.
00:29:31.000They want to get rid of all their small franchisees.
00:29:35.000And they, you know, you take the Hinkle, who was, you know, the top first five franchisees, Cox, Roloffs, Willoughby, all the good operators that have been here 25, 30 plus years, they're getting out because the company is anti-friendly to small franchisees.
00:29:57.000My concern with the big franchisees is if they're not successful, or if any of the franchisees aren't successful, the mothership's not going to be successful.
00:30:06.000And right now, they don't communicate with the franchisees.
00:32:27.000But really, I don't care if you're a dentist, architect, you do podcasts, do media, if you do pizza, just find something you love to do and work it to the bone.
00:32:58.000But I think I had to pick, I find something I love.
00:33:03.000I find something I love and I'd start from there.
00:33:06.000I wouldn't, the reason I don't want to jump back in the pizza business right now is I'm not sure I want to be in the processed food business.
00:33:12.000You know, I'm working on some organic farms and some really fresh stuff that's really healthy, you know, that betters people's lives and betters their health.
00:33:22.000I get more enjoyment out of the gardens and exploring organic farms and the nutrients and the science and how we got away from the farm and the health of the farm and the communities of the farm and got into the centralized farming kind of structure that we have.
00:33:39.000But I'm really enjoying the organic farm and making people better, making people healthy.
00:33:59.000I mean, the house divided cannot stand.
00:34:03.000The biggest problem we got is we're divided.
00:34:06.000And, you know, the right has to own their part in this, but the left, mainstream media, and the elitists who are running the country with the media, they'll scorch the planet.
00:34:18.000They'll scorch the earth for power and control.
00:34:21.000The things they do to humanity are, you know, they're just horrid.
00:34:27.000And when the electorate sees this negativity in this division, they get scared.
00:34:40.000And once you get your consciousness from a place of kindness and love and respect and mutual respect and kindness, and you pull that down to bitter shame, guilt, hate, you're going to look at the world completely different from this lens down here versus this lens up here.
00:34:58.000This is where you want your conscious.
00:35:00.000So if you're operating from up here, you're going to see a situation like this.
00:35:04.000And if you're scared and fearful and jealous, you're going to look at it from down here.
00:35:09.000I don't like the way the mainstream media is pulling people's level of consciousness down to where they see the world in a way that it's, you know, it's bickering, it's hatred, it's attacked the other person.
00:35:23.000So it's the division that the left mainstream media is doing that is creating a terrible dynamic with the hearts and souls of the American public, which I think are, you know, when you get down to it, are just good, hardworking, loving people.