Black Enterprise Magazine, Feb 1988

Herman Cain bases his campaign for the presidency on his success as a manager and CEO of Godfather’s Pizza. He claims to have brought Godfather’s Pizza from the edge of bankruptcy to profitability during his time there. He has never released any annual profit and loss statements to back this up. Pillsbury assigned Cain to Godfather’s in 1986. The company reached all time high profits in 1983, was still profitable in 1984, and only apparently was not profitable in 1985 due to a lawsuit. That lawsuit was settled before Cain became manager in 1986. It is simply a false statement that the company was on the edge of bankruptcy when he took over. The company had just been bought by Pillsbury, the second largest restaurant chain owner after McDonald’s in the United States, and they were predicting a bright future for their new pizza restaurant chain when Cain took over.

The only real objective evidence that is publicly available for how well he did is annual sales. How much did sales increase or decrease during Cain’s time at Godfather’s Pizza? Competition wise, Godfather’s dropped from fourth largest sales among Pizza chains to 11th during the time he was associated with the company. Here is a year by year breakdown:

B.C. (Before Cain):

1983: $340 million[1] (pre-tax earnings – $18.7 million)[2]. (sales per store – $432,000)[3]

1984: $365 million (911 stores)[4]. (pre-tax earnings – $978,000)[5]

1985: $325 million[6]. According to Cain the company lost $1.5 million this year[7]. However, this may have included a $2 million dollar lawsuit settlement prior to Cain’s arrival.

Pillsbury assigns Herman Cain to run  720 Godfather’s Pizza Stores on April 1, 1986[8]:

1986: $275 million[9] (640 stores)(sales per store – $402,000)[10]Note: Cain has kept annual profits and losses secret from this point on.

1987: $260 million[11] (605 stores) (sales per store – $414,000)[12]. Note, while sales at Godfather’s dropped 5%, national Pizza sales “soared nearly 10 percent” in 1987[13]. In November, 1987, Cain predicted that in three years, Godfather’s would have over 1,000 stores. “‘We will exceed 1,000 units,’ he says, adding that ‘it may be exceeded by one unit or by 600.'”[14]. Cain’s prophesy of 1001-1600 stores by 1990 failed. The number of stores actually fell from 605 to 512.

1988: $242.5 million[15] (563 stores) On Jan 7, 1988, Cain says that he knows of no plans for Pillsbury to sell Godfather’s Pizzas.  He says, “I would be the most surprised person in Omaha if they sold Godfather’s.[16]” Two months later, on March 17, Pillsbury announces that it is selling Godfather’s because it was not performing up to expectations. In September, Pillsbury sells Godfather’s Pizza to Cain and management group in a leveraged buyout for $30 or 40 million dollars[17].

1989: $225 million[18] (509 stores)

1990: $229 million[19]  (512 stores)

1991: $231 million[20] (511 stores) (sales per store – $440,000)[21]

1992: $242 million

1993: $249.5 million

1994: $244 million[22] (514 stores) (sales per store – $490,000)

1995: $260 million (525 stores)

1996: $265.5 million (540 stores) (sales per store – $500,000) Cain becomes CEO of the National Restaurants Association in 1996, but was still on Godfather’s Management Board.

1997: $270.8 million[23]

1998: $280 million

1999: $280 million

2000: $288 million[24]

2001: $280 million

2002: $287 million (560 stores) (sales per store – $502,200)[25]. Cain steps down from Godfather’s Management Board

2003: $304 million[26]

2004: $313 million[27]

Inflation from 1985 to 2001 was 64.5%. In terms of 2002 dollars, the $325 million sales of 1985 would be the equivalent of $534 million at the beginning of 2002. The final sales in Cain’s last year with Godfather’s Pizza was $287 million total. When we compare it with the year before Cain’s arrival, adjusted for inflation, we find that sales at Godfather’s Pizza dropped 46% during Cain’s association with Godfather’s Pizza.

We might see how Cain did in just the years where he was CEO. Adjusting for inflation in 1985 to 1994 in order to compare 1985 to the last year, 1995, that he was a full time CEO at Godfather’s, 23 the $325 million Godfather’s sold in 1985 equals $448 million in 1995 dollars. Thus the drop was from $448 million to $265.5 million (in 1995 dollars). This is a drop of about 41%. Adjusted for inflation, sales dropped by about 41% in the ten years that Herman Cain ran the company as CEO. He had five years where sales decreased and five years where sales increased, but the years that sales increased barely kept up with inflation.

We might also note that total franchise pizza sales were $5.7 billion dollars in 1985 [28] and grew to over $11.2 billion in 1995 [29]. Thus, while sales went up 100% on average, Godfather’s under Cain went up 0%. In fact, it actually dropped from $275 to $265 million, a drop of four percent.

Godfather’s Pizza was bought for 300 million by Diversifoods Inc. in 1983. Pillsbury Inc. bought most of Diversifoods’ restaurants for about $390 million in 1985. Because Diversifoods sold over 300 Burger Kings and other restaurants to Pillsbury, it is hard to know how much Pillsbury actually paid for the 740 or so Godfather restaurants it bought. It was probably $100-150 million. Three years later, after Cain had been managing the restaurants for 2 1/2 years, they sold it to Cain and twenty other managers for $30-40 million dollars. Cain was sent by Pillsbury to increase the company’s value. He failed miserably. If he had succeeded, Pillsbury would not have sold the company with huge losses around $100 million dollars.

The goal of a management buyout is generally to quickly return a company to profitability and sell it at a profit. Cain was unable to accomplish this in the next seven years that he ran the company. When his run as CEO ended, he was still heavily leveraged to the bank for at least the $30 million dollars his management group had borrowed in 1988 to buy the company. This is from an article in Nation’s Restaurant News in January, 1995.

“My next goal is for Godfather’s to reach its goal of financial independence,” he says. Still heavily leveraged, the company has reduced its debt but still has some way to go. “I want to retire debt in order to allow us to grow the way we want to[30].”

Cain took over the fourth largest Pizza company in America with no debt and a great promising future and in ten years turned it into the eight largest pizza company in America, one with so much debt, it could not be sold. It is certainly true that he “turned around” the company as he likes to say.

Please ask reporters to question Herman Cain about why he doesn’t release his earnings statements from his Godfather Pizza years. He is asking for our vote for president, but not being honest with us about how well he did managing Godfather’s Pizza. Imagine a baseball player who tells you how great he did and how his terrible team turned around after he joined it, but he refuses to tell you his batting average. One has to suspect that he did not really contribute to the team’s turnaround or if there was a turnaround at all. For 25 years, Cain has bragged how he turned around Godfather’s Pizzas in hundreds of speeches, dozens of articles and five book. He has never once mentioned the profits Godfather’s made in a single year under his management. If one wants to find the profits made by any other major pizza restaurant chain, it is public information. Only Cain has hidden this information.

If anybody has any more actual facts about profits, losses and sales at Godfather’s during this time, please inform me through a comment or email.

For more information on how Mr. Cain did as a manager at Godfather’s, read my blogs starting here

[1] Restaurants and Institutions 1984 Vol. 94 No. 6 pp. 149-154.

[2] Wall Street Journal, Pillsbury Won’t Sell Pizza Chain Acquired In Diversifoods Pact, August 20, 1985

[3] Godfather’s Back in the Family, Restaurant Business, Ferrell, Kevin, Nov. 1, 1987.

[4] New York Times, The (NY) – Tuesday, Bern, Eric N. September 20, 1988, Eric N. Berg. Godfather’s Pizza Sold By Pillsbury

[5] Above, Pillsbury Won’t Sell

[6] Pizza market in on the move, Jacque Kochak, Restaurant Business v85.(May 20, 1986): pp99(9).

[7] Omaha World-Herald, Jordan, Steve, First Growth in 3 Years Godfather’s Reports 6 – Week Rise in Sales, November 1, 1986.

[8]  PRNewwire reported that Cain had taken over 817 stores on April 2, 1986. A week later the Omaha World Herald reported the number at 720. PRNewswire, Miami, Burger King Corp. announces appointment of Herman Cain as president of Godfather’s Pizza, April 2, 1986. Omaha World Herald, Steve Jordon, Richard Janda, New ‘Godfather’ Plans Boost in Pizza Market, April 9, 1986.

[9] Pizza Hut Inc. Report, pg. 273,

[10] Godfather’s Able Pharoah, Nation’s Restaurant News, Sept 14, 1987.

[11] Godfather’s: back in the family. (restaurant chain) (company profile), Farrell, Kevin,Restaurant Business v86.n16 (Nov 1, 1987): pp119(7).

[12] Above, Godfather’s Able Pharoah

[13] What’s New in the Pizza Business: Taking the Business Beyond Tomato Sauce, N.Y. Times, Deutsch, Claudia H., May 22, 1988

[14]Above, Godfather’s: back in the family.

[15] The top 100 Chains, Nation’s Restaurant News 22.n32, August 8, 1988.

[16] Omaha World-Herald, Jordan, Steve, Godfather’s Chief Doubts Pillsbury Will Sell Firm, January 7, 1988.

[17] Wall Street Journal [New York, N.Y] Business Brief: Pillsbury Co., 20 Sep 1988: 1. They estimate the sale price at $40 million, however Fortune, one month later estimated it at $30 million. October 24, 1988, Madden, Stephen, Fortune, Pizza to Go.

[18] Pizza (restaurant market segment), Jacque Kochak, Restaurant Business v89.n8 (May 20, 1990): pp143(8).

[19] Bicycling Through Corporate America, Paul Wolsfeld,,

[20] Pizza: market segment report. (includes related article) (Industry Overview),Carol Casper, Restaurant Business v92.n3 (Feb 10, 1993): pp126(7).

[21] Pizza: market segment report. (pizzerias) (Industry Overview), Scarpa, James, Restaurant Business v91.n8 (May 20, 1992): pp145(11).

[22] Data for ’92, ’93, ’94, from Top 100 chains ranked by U.S. systemwide foodservice sales, Nation’s Restaurant News; 8/7/95, Vol. 29 Issue 31, p84, 2p, 1 Chart

[23] Data from ’95, ’96, ’97 from Top 100 chains ranked by U.S. systemwide foodservice sales. Nation’s Restaurant News, 00280518, 06/22/98, Vol. 32, Issue 25

[24] Data from ’98, ’99, 2000 from Nation’s Restaurant News; 7/23/2001, Vol. 35 Issue 30, p51, 13p, 15 Charts

[25] Nation’s Restaurant News; 7/25/2005, Vol. 39 Issue 30, p62-62, 1/2p

[26] Data from 2001, 2002, 2003 from  Second 100 Chains, Nation’s Restaurant News; 7/26/2004, Vol. 38 Issue 30, p1-124, 14p

[27] Second 100 Chains, Nation’s Restaurant News; 7/25/2005, Vol. 39 Issue 30, p62-62, 1/2p

[28] Hungry Howie’s Pizzas and Subs Inc., viewed November 27, 2011,

[29] Nation’s Restaurant News / Sept 18, 1995, Pizza still has operators rolling in the dough.

[30] Herman Cain: president, National Restaurant Association, Godfather’s Pizza, Omaha, Nebraska, Nation’s Restaurant News, Howard, Theresa, January 1, 1995