The Mess at Papa John’s


That Papa John Schnatter would use a media sensitivity training seminar set up by their ad agency to indict Colonel Sanders for using the n-word is so bizarre. The Colonel may or may not have been a racist, that’s for historians to decide, but our readers should know he sold Kentucky Fried Chicken to John Y. Brown in 1965 and has been dead for 38 years. 

Schnatter’s loose lips now put him in the same camp as former race luminaries Jimmy The Greek and Donald Sterling. The only thing I’ll say here about Schnatter’s faux pas: It’s not good for selling pizzas.

The board of Papa Johns, of which Schnatter still holds a seat, has a dilemma. How does a consumer company distance itself from a shoot-from-the-hip founder, 30% shareholder and brand namesake, a man who can’t seem to put a muzzle on his inner voice? This isn’t a simple task for the board, mind you, when you consider the pizza brand and Schnatter are so connected.

But, just how connected?

Schnatter has been on television 40 weeks per year for the past 30 years pitching ‘his” Papa John’s as the place to get “Better ingredients. Better pizza.” Over the past three or four years, he and one of the top NFL quarterbacks in history, Peyton Manning, have been chummy on most NFL telecasts. Manning even became a franchisee in Denver. That’s connected.

John Schnatter is the Papa John of Papa John’s Pizza and all the brand equity revolves around him.

But now the worm has turned, and the brand has decided to run, not walk away from Schnatter. The company publicly stated he is no longer a spokesperson for the company or the brand and asked him to cease all media appearances on behalf of the company. Don’t count on it. Schnatter’s shown no control over what comes out of his mouth and he’s become a lightning rod for criticism.

Upset with  Obamacare in 2012, Schnatter told shareholders the pizza chain would “shallow out” the insurance costs and pass them on to customers. Hah, a mere 14 cents per pizza, as I recall. His comments became a huge punch line with late night pundits.

Last fall, Schnatter tied the pizza chain’s sales weakness to the NFL’s reduced television and stadium audiences.  That, of course, was in reference to the pizza chain’s official NFL sponsorship and the media controversy surrounding certain NFL players who insisted on kneeling during the national anthem. Schnatter’s comments created a social media fire storm and an aura of racism surrounded the brand. No wonder Papa John’s ad agency invited Schnatter to media sensitivity training.

Schnatter’s corporate status right now is akin to Steve Wynn, who faced sexual harassment allegations. Wynn Resorts ultimately decided to move on from Steve Wynn when they started to see a number of conventions canceled.

Papa John’s International, 70% owned by individuals and institutions who are not named John Schnatter, is facing a similar backlash.

The University of Louisville’s board of trustees booted Schnatter off their board and is taking down the Papa John’s logos on the Cardinals stadium. The Yankees and Washington Nationals and countless other professional sports venues are throwing Papa John’s pizza licenses in the trash.  And, can you imagine the conversations in homes across America last weekend during pizza ordering hour:  “No Papa John’s!”

Schnatter has doubled down, just like Wynn did initially, arguing it was a mistake for him to resign as chairman of the company. He has hired an attorney, according to the Wall Street Journal. 

Franchisees, store managers, employees and drivers are the losers if he persists. Schnatter’s days as “Brand Ambassador” are over. Time to move on. Wynn eventually sold his shares in Wynn Resorts and moved out of the penthouse suite in the hotel. Schnatter should do the same.

As for Colonel Sanders, he’s enjoying something of a renaissance. Darrel Hammond, Norm Macdonald, Jim Gaffigan and even Reba McEntire have played the Colonel on KFC commercials.

One thing is for sure: It will be years before the marketers let Paul Rudd, Ben Stiller or Robert Downey Jr. play him on any commercials.

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