Why a local school district is dropping its contract with a popular pizza provider

The State college Area School Board voted 5-4 to cancel its contract with Papa John’s Pizza for student lunches. The decision was based upon racially tinged comments made by former CEO John Schnatter.
The State college Area School Board voted 5-4 to cancel its contract with Papa John’s Pizza for student lunches. The decision was based upon racially tinged comments made by former CEO John Schnatter. AP

Papa John’s pizza, which as long been a favorite lunch item for students, will not be served for the rest of this year at State College elementary and middle schools.

In a 5-4 vote Wednesday night, the State College Area school board of directors approved a recommendation from Superintendent Bob O’Donnell and Business Manager Randy Brown to cancel the bid award for Papa John’s Pizza, no later than Oct. 31.

The former CEO and chairman’s racially tinged comments are not in line with the district’s Climate and Inclusive Excellence Policy, the recommendation read.

The contract with the franchise, however, will be reopen for consideration at the end of the 2018-19 school year.

“This truly relates to relationships within our community,” O’Donnell said. “We’ve been really trying to improve relationships with our community, and that means everyone in the community. And I really believe that if we do this, for this time period only, that would help.”

The vote stems from a discussion at the Aug. 13 meting when board member Lori Bedell, supported by Gretchen Brandt, brought up concerns during the discussion on whether to approve the contract, about the message the board was sending by doing business with the embattled national pizza chain.

The most recent controversy stems from a Forbes report in June that founder and then-Chairman John Schnatter used a racial epithet while on a conference call in May. This report came after Schnatter had already resigned as CEO in December after controversial remarks made in a November earnings call during which he blamed the NFL national anthem protests for hurting Papa John’s shareholders.

Schnatter has since resigned as chairman, as well, but remains a roughly 30 percent shareholder in the company.

“Regardless of the decision we make, this is a learning opportunity for the kids about language, respect, consequences, race — and I feel moved in both directions on this,” Bedell said as the August meeting. “But either way, I think we will be able to have a conversation with our kids if we embrace this chance — over pizza.”

According to Food Services Director Megan Schaper, Papa John’s Pizza has been a net positive in sales for the school district for the past 15 years. She told the board in August that for one of those years, they went with a different vendor, and the students’ displeasure showed in drastic drop in sales. After that, they quickly pulled that vendor and went back to Papa John’s. On days they serve Papa John’s pizza, 85 percent of students buy lunch, she said.

Other board members brought up concerns about punishing the local franchise owner, based in Canton, Ohio, for the actions of the CEO, and about a potential drop in sales if Papa John’s wasn’t chosen.

The board ultimately decided to accept the bid award 5-4 at that August meeting.

Board member Scott Fozard said on Wednesday that he had concerns about holding a large corporation responsible at the local level, and, from a policy and procedure standpoint, going back and canceling a contract they had already approved after “nothing has changed since that point in time.”

Between that board meeting and Wednesday’s, O’Donnell said he had time to go out and speak with families in the community about the matter, which then prompted him to make his recommendation. The contract has a built-in 30 days in which it can be canceled, meaning the district has until Oct. 31 from the start of the Sept. 30 contract to find a new vendor for elementary and middle school students.

Based upon the corporation’s proposed restorative practices and the local franchisee’s commitment to inclusivity, the recommendation read and O’Donnell reiterated, the district would continue to have conversations with the franchise owner throughout the year, and revisit the relationship next time the bid comes up.

According to the recommendation, Schaper will lead the process to include a new collection of price quotes, excluding Papa John’s, and a blind taste test by elementary and middle school students. The results will then be presented to the board when complete.