Dive Brief:

• Papa John’s will provide a special end-of-year bonuses totaling $2.5 million to 14,000 team members in the company’s corporate restaurants and supply chain, according to a press release. 
• The latest bonus follows previously provided targeted bonuses, incentives and crisis pay for corporate restaurant and supply team members, in addition to expanding health, wellness, paid time-off and college tuition benefits.
• Pizza delivery companies reported strong same-store sales gains since the pandemic, allowing them to provide additional incentives to employees and go on hiring sprees. Domino’s will also provide end-of-year bonuses totaling $9.6 million to corporate restaurant and supply chain employees.

Dive Insight:

While independent restaurants and legacy chains alike have struggled to drive sales amid dining room restrictions and other pandemic pressures, Papa John's has enjoyed significant revenue gains. In Q3 2020, the pizza restaurant's revenues rose 17% to $472.9 million and same-store sales increased 24% in North America. This also reflected six consecutive months of comp sales growth. 

Leveraging that financial stability to award bonuses is a savvy move that could further entrench employee loyalty and a secure labor base. The chain has also been intentional with franchisee support, launching an $80 million program in 2019 to help franchisees that CEO Rob Lynch credits with the success Papa John's has had despite the COVID-19 disruption. The third quarter of 2020 was the last period of that support program. 

This level of support for both operators and employees could differentiate Papa John's from other major restaurant chains because many companies don't have the financial bandwidth to reward their talent for their hard work this year. These bonuses, along with those being distributed by Domino's, also reflect how well insulated the pizza segment was from the pandemic's economic upheaval thanks to the category's strong and mature delivery channels. 

Papa John's has already seen significant success following its careful investment in franchisees. In September, the chain signed one of biggest traditional store development deals in North America in over 20 years with HB Restaurant Group. Though employee bonuses likely won't have as dramatic an impact on the company's near future, rewarding workers for their contributions during an unprecedented year could make employees more inclined to stay at their jobs even as COVID-19 cases rise and the industry is poised for another chaotic year.