NEW YORK – The founder of Papa John’s says the pizza chain does well with him as its public face, and that it was a mistake for the company to scrub him from its marketing materials after he acknowledged using a racial slur.
John Schnatter told the Associated Press he believes he can return to TV and radio ads once the public understands the context of his comments.
“My persona resonates with the consumer because it’s authentic, it’s genuine and it’s the truth,” Schnatter said in a phone interview late Wednesday, with his lawyer and representative present.
Papa John’s International Inc. had said last month that Schnatter would no longer be in any of its marketing, after Forbes reported he used the N-word during a media training conference call in May. The company also formed a special committee to oversee an external audit of its diversity practices.
Schnatter apologized for using the word, but said it was taken out of context and that he didn’t use it as an epithet. He resigned as chairman after the report was published, but subsequently called the decision a “mistake.”
Since then, Schnatter has criticized Papa John’s handling of the matter, saying it acted hastily without investigating. He also criticized the company’s failure to clarify his comments last year blaming disappointing pizza sales on how NFL leaders were handling player protests during the national anthem. Those comments were seen as insensitive to players, and led to Schnatter stepping down as CEO last year.
Schnatter, who remains a board member and owns nearly 30 percent of Papa John’s stock, said the remarks were aimed at the league’s leadership, not its players.
Papa John’s, meanwhile, pointed to the Celebrity DBI – an index that touts ratings of how well celebrities can influence consumers – which it said showed Schnatter’s trust and endorsement ratings fell after his NFL remarks.
Keith Hollingsworth, a professor of business at Morehouse College, said it would be best for the company if Schnatter kept a low profile for the near term.
“Even if everything he’s saying is true, I’m not sure you can convince people of that,” Hollingsworth said.
Hollingsworth said he thinks Schnatter can eventually return in a public role, but that he needs to give it some time.
Even before the backlash to Schnatter’s NFL remarks, a key sales figure at Papa John’s had been slowing partly because of competitive pressures, noted Alexander Slagle, an analyst for Jefferies. Slagle said he believes the negative publicity will continue to be “painful” for the company, but “the brand will survive.”
Since the NFL remarks last year, Schnatter said he didn’t feel comfortable appearing in TV and radio ads. His image remained on a logo all over Papa John’s website and on its pizza boxes, but the company began removing those last month too.
Schnatter said Papa John’s had been testing his return to TV and radio ads before the latest controversy, and the tests came back with “virtually no negativity” toward him.
He said the company is suffering not because of him but because it moved away from its “roots” and made too many marketing changes at once. In addition to his disappearance from ads, he said, Papa John’s stopped focusing on its “better ingredients” mantra and made misguided changes, such as tweaking the red and green in the logo “to cater to the millennials.”
Papa John’s said its logo has not changed, except for the removal of Schnatter’s image. The company said the only exception is the mobile app, which features a white Papa John’s logo against a red backdrop.
The company reports its quarterly results next week, and Wall Street analysts expect a key sales figure in North America to decline for the third quarter in a row.
Papa John’s has adopted a “poison pill” plan to prevent Schnatter from mounting a takeover. Schnatter, meanwhile, has requested documents from the company about its actions following the Forbes report, and believes they will help vindicate him.
“Once the public actually grasps what the board and what the management did to cause the problem and the truth gets out, of course I can be back in the ads,” he said.
Papa John’s, which is based in Louisville, Kentucky, began operations in 1984 and has more than 5,200 locations globally.
Subscribe to the Morning Review newsletter
Get the day’s top headlines delivered to your inbox every morning by subscribing to our newsletter