By: Rudy Sanchez
Papa John’s has had a stellar rise, from their humble beginnings as a literal hole-in-a-wall, to becoming one the country’s largest pizza delivery chains. And for that whole time, they’ve relied on their head papa, John Schnatter, as their spokesperson and face of the company.
No stranger to controversy, Schnatter hasn’t exactly been shy about his political beliefs, having spoken out against the ACA (“Obamacare”), and has been a supporter of both Mitt Romney and Donald Trump’s presidential campaigns.
Papa John’s has been able to weather past comments made by Schnatter, particularly when he said that the ACA would be far too costly for his business, raising prices by “11 to 14 cents per pizza.” But it was last year’s well-publicized tantrums regarding the NFL that may have been the last straw for Schnatter and Papa John’s.
It began with an earnings call last year when Schnatter pointed the finger at the NFL for lower ratings and pizza sales. He accused the NFL of not taking a leadership role in the handling of police brutality protests by NFL players. Not only did sales continue to fall, but Neo-Nazi sites like The Daily Stormer wholeheartedly embraced the pizza chain as the “official pizza of alt-right.”
While Papa John’s did its best to distance itself from the alt-right, the damage had already been done. This row precipitated the stepping down of John Schnatter as CEO and President of the company. He still retained a role as a board member and the company’s largest shareholder, as well as continuing to be the face of the company and brand.
In an effort to repair his image, in May of 2018, Schnatter met with a marketing firm on a conference call where he repeatedly used the “n-word,” lamenting that Colonel Sanders got away with using the same language in the past. Not only that, he talked about his upbringing in Indiana, where he allegedly said, “people used to drag African-Americans from trucks until they died.”
As news of this event hit last week, Schnatter resigned from the company he started in a broom closet of his father’s tavern using the profits from the sale of his Camaro.
But a larger question looms for Papa John’s: how does the company itself recover when it’s brand is so tied to such a controversial spokesperson?
“Papa” John Schnatter is the literal face of this pizza empire, with his likeness even showing up on their boxes. It’s hard to not read their slogan “Better Ingredients, Better Pizza, Papa John’s” in Schnatter’s voice. There are over 5,000 Papa John’s locations around the world, making it the 3rd largest pizza delivery chain. Some immediate decisions have already been made concerning Schnatter, as he agreed to no longer be featured in marketing or promotional materials, but can the embattled chain right the ship? How do they improve their public perception and ultimately disassociate themselves from their controversial founder?
There’s always a risk a brand takes when using a spokesperson to promote their products and services. You trade on the public equity of that individual, and when they are beloved, you can take that positive equity and build your brand upon it. In most instances, however, the brand is already established when a spokesperson is brought in, making it easier to drop that personality if things sour.
Lance Armstrong was dropped from countless sponsorships and was ousted from his own foundation, renaming itself “Livestrong” in an effort to distance itself from the fallen cycling phenomenon. As a result of Armstrong’s doping sins, the foundation took a large hit: it went from annual revenues of $47 million to $10 million. At its peak, they distributed over 2.2 million of those iconic yellow bracelets annually, in the year following USADA’s damning report, that figure dropped to 673,000. The Livestrong Foundation also lost half their staff. While Livestrong took a massive hit, they managed to survive and even kept their iconic branding (the Livestrong nickname, the yellow wristbands) while also distancing themselves from Armstrong.
Another company that course corrected after a huge controversy was Jack in the Box. After several cases of food poisoning resulting in hundreds of E. coli infections and 4 deaths, Jack in the Box started a comprehensive brand repair, including logo changes, as well as creating a fictional CEO spokesperson with a complete backstory. This fictional CEO was a tough, no-nonsense corporate leader, projecting strength and decisiveness, while simultaneously being a parody of corporate managers. This character resonated with the public and changed the conversation about the Jack in the Box brand.
Jack in the Box handled the situation by addressing the issue and finding a solution to the problem, hiring a food safety expert to prevent further E. coli outbreaks, quickly settling lawsuits, and creating a new brand image. They also created new products, making the conversation about something other their E.coli outbreaks.
Papa John’s has taken the first steps: severing ties with Schnatter, apologizing and letting the public know it’s taking steps to avoid the problem in the future. The larger question looms: How will Papa John’s replace their once successful spokesperson and use a different promotional strategy?
So far they have puppies. Puppies are cute and more importantly, are incapable of using racial slurs.
That’s a start anyway.
Rudy Sanchez
Rudy Sanchez is a product marketing consultant based in Southern California. Once described by a friend as her “technology life coach,” he is a techie and avid lifelong gamer. When he’s not writing or helping clients improve their products, he’s either watching comedies on Netflix, playing the latest shooter or battle royale game or out exploring the world via Ingress and Pokémon Go.
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