September 6, 2018
Papa John’s Treading Water in Crisis
When Papa John Schnatter was ousted by the successful pizza company he founded, it may not have been an existential PR crisis, but it was certainly a walk through a proverbial minefield for the board deciding the company’s immediate future.
First, Schnatter was on everything. He was, literally, the face of Papa John’s and at the center of nearly all marketing and advertising. And, then, he was not. Schnatter was gone, persona non-grata at the office and in the commercials. As he continued to proclaim his innocence, Schnatter, by default, kept the company in the headlines for all the wrong reasons.
Following the news of Schnatter’s ouster and the subsequent public relations firestorm, Papa John’s sales plummeted, down nearly 45 percent compared with this time last year. So far, one of the only positive headlines the company has enjoyed is when it was announced they hired financial advisors to help them out… because, clearly, Papa John’s needs a new direction.
But not only with its finances…
The brand’s image is suffering greatly because of this process. People have chosen other brands for their pizza, and it appears they’ve decided to stick with those choices. Some have wondered if Papa John’s would end up on the auction block, absorbed by a bigger brand that could wipe the PR slate clean. At this point, though, that seems unlikely. Any decision of that kind would still have to be run through Schnatter, who remains a major shareholder with at least a 30-percent stake in the company.
And, that, in and of itself, is part of the image problem Papa John’s will have to navigate. No matter what they do, aside from a complete top-down rebranding, which doesn’t seem likely to happen at this point, Schnatter will be an integral part of that plan.
While rank-and-file consumers may not be “in the know” about the inner workings of Papa John’s business situation, the public does appear to have a strong opinion about the brand, and they are voting with their wallet. From the embarrassment of Schnatter blaming the NFL for the company’s falling sales last year, to reports of Schnatter making racially charged comments on a conference call, the issue that led to his ouster, Papa John’s has been struggling to connect with consumers.
The series of self-inflicted PR wounds comes at a time when competition is increasing and Papa John’s marketing was already in transition. Now, the former face of the company is openly fighting with the board that controls it. The protracted conflict is not a good look for a brand in crisis. Someone needs to get control, stabilize the messaging, and put Papa John’s back on track… and the window of opportunity to do that with the least amount of trouble is closing fast.