Papa John’s cuts costs for North America franchisees as sales fall

(Reuters) – Papa John’s International Inc (PZZA.O) on Friday said it would lower royalties and fees charged to its U.S. and Canadian franchisees as sales at the U.S. pizza chain decline following the acrimonious exit of it founder.

The Papa John’s store in Westminster, Colorado, U.S. August 1, 2017. REUTERS/Rick Wilking/File Photo

The company will cut royalties, food-service pricing and online fees through 2018, while also funding the rebranding of the chain.

This comes days after the company said its North American comparable sales for July had fallen 10.5 percent and would continue falling in the coming months.

Founder John Schnatter resigned as chairman of the board in July following reports that he had used a racial slur on a media training conference call.

“We appreciate the assistance being extended to our franchisees and believe the assistance program will help mitigate the impact that the founder’s inexcusable words and actions have had on franchisees,” Vaughn Frey, president of Papa John’s Franchise Association said in a statement.

Reporting by Karan Nagarkatti in Bengaluru; Editing by Cynthia Osterman

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