NEW YORK — Papa John’s founder John Schnatter is no longer chairman after using a racial slur, but his image is still part of the pizza chain’s logo and he remains the company’s largest shareholder.
The situation illustrates the difficulty for companies closely tied to a single person, and that Papa John’s may need to distance itself further from Schnatter after dealing with backlashes brought about by his comments.
The chain announced late Wednesday that Schnatter was leaving the company’s board, hours after he apologized for using a racial slur during a conference call in May. He had stepped down as CEO last year after blaming disappointing pizza delivery sales on the outcry surrounding football players kneeling during the national anthem.
Schnatter has long been the face of the brand, appearing on pizza boxes and in TV ads for the chain. Papa John’s has noted in regulatory filings that its business could be harmed if Schnatter’s reputation was damaged.
Papa John’s needs to distance itself from Schnatter’s image, said Barron Harvey, dean of Howard University’s business school. He said this is a chance for the company to retool its marketing strategy so it’s not so tied to one person.
“They have to see this as an opportunity, not a challenge,” Harvey said.
Companies can leverage great personal stories to connect with customers, said Keith Hollingsworth, a professor at Morehouse College’s business department. But he echoed the risks that come with marketing strategies that are overly dependent on a single individual.
“Anytime you’re dealing with humans, you have no fallback,” he said.
Hollingsworth pointed to Subway’s Jared Fogle as another example of a spokesman becoming a liability. The sandwich chain in 2015 quickly severed ties with Fogle, who was later sentenced for possessing child pornography and traveling to pay for sex with minors.
Still, Hollingsworth said he doesn’t think the …read more
Source:: Deseret News – Business News