UPDATE, Aug. 27, 2019: Papa John's founder and former CEO John Schnatter has sold over 725,000 shares as part of a block sale to UBS completed last week, according to a Monday SEC filing. The shares sold for over $30 million. As part of his agreement with UBS, Schnatter will not sell any more common stock until Sept. 2. 

Dive Brief:

• Papa John's founder and former CEO John Schnatter has sold more shares in the company, unloading 250,000 shares worth a total of $10.7 million last week, according to Louisville Business First. The move comes just months after Schnatter sold nearly 3.5 million shares to UBS for $157.5 million. 
• This leaves Schnatter with just over 5.25 million shares in the company, or about half of what he owned in May before he started selling, which was about 31% of the company's total shares. 
• Papa John's second quarter earnings, reported earlier this month, showed a 7.1% decrease in its total revenue over the same quarter last year, while net income was down 25.4% year over year. 

Dive Insight:

This activity comes just over a year since Schnatter resigned as CEO after dropping a racist slur on a call and it shows that he may finally be willing to relinquish control after a long and sometimes ugly fight for control of the company that has included lawsuits and the launch of his "savepapajohns.com" website. In addition to selling off shares, Schnatter gave up his position on the board of directors in March and had his contractual rights as founder terminated in May. His website hasn't been updated in a year. 

Meanwhile, the company has implemented numerous ambitious initiatives to move forward, including a $3.6 million investment to scrub Schnatter's image from marketing materials, a restructured C-suite including the company's first chief people officer, a sharpened focus on diversity and the recruitment of Shaquille O'Neal to serve as a brand ambassador and board member. O'Neal is tremendously popular and could very well help Papa John's move past its Schnatter-induced image issues.

It is splitting an $80 million investment between its O'Neal marketing campaign and a franchisee assistance program, which could also be a major key to a turnaround. Papa John's is about 85% franchised and buy-in from this community is critical for the health of any brand. The company said it has the support of its franchise advisory council to move forward with its marketing and franchisee assistance initiatives. 

Still, the company's Q2 earnings call indicated that much work remains, with same-store sales down 5.7% and revenues down more than $30 million from the same period a year ago. The company is at least moving in the right direction, generating its fourth consecutive quarter of improved performance. Same-store sales immediately following the Schnatter fallout last year were down nearly 10%, by comparison. Such progress perhaps explains why CEO Steve Ritchie remains optimistic, stating the company expects to return to positive sales by the end of this year. If that indeed happens, it would be a remarkable turnaround.

Some analysts are less optimistic about this timeframe and its recent $80 million marketing and franchisee investment. Stifel analyst Chris O'Cull said that the latest initiative signals franchisees are likely expected to have issues with profitability over the next few quarters.

If further progress remains elusive or slow, the dissipation of Schnatter's influence will make it harder to place the blame entirely on him, as his attachment to the brand and his position as a shareholder continues to wane.