As Papa John’s founder re-emerges, chain’s PR firm fires back

John Schnatter calls his resignation a ‘mistake’ and accuses Laundry Service of extortion. Here’s how communicators think the pizza company and the agency should proceed.

The hits keep on coming for those connected to Papa John’s recent crisis.

After the company’s founder and former chief executive, John Schnatter, resigned as chairman of the board following reports that he used a racial slur during a call with his PR and marketing agency, Schnatter’s actions are still causing backlash for the agency and the pizza company.

The Onion has lampooned Schnatter, and even the family of the late Colonel Sanders lashed out, calling him a “weasel” in a recent interview.

Deadspin reported:

The Louisville Courier-Journal spoke with Sanders’s descendants, who said the chicken man was not racist—even though he was once considered as a VP candidate for the very racist segregationist politician George Wallace—and that Papa John should keep the Colonel’s name out of his f***ing mouth.

Schnatter recently said stepping down was a “mistake” and vowed to fight his way back into the company.

The New York Times reported:

Then on Sunday [July 15], Papa John’s booted him from subleased office space at the corporate headquarters in Louisville, Ky., and asked him to stop speaking to the media.

But Mr. Schnatter, who opened the first Papa John’s restaurant in 1985, isn’t going to make things easy. Both he and his lawyer sent letters to the board over the weekend suggesting that he was pressured to resign without any investigation into the circumstances, which he said included an extortion attempt. Relinquishing the position, he wrote, “was a mistake.”

“John is not going to go quietly into the night and watch the company he worked so hard to build fall off a cliff,” said Mr. Schnatter’s lawyer, Patricia Glaser, who has been hired in the past to handle contract disputes by clients including Keith Olbermann and Harvey Weinstein. “He is going to protect shareholders and the company as much as he can.”

Schnatter is leveling extortion allegations against the agency.

Yahoo Finance reported:

He told the board that Papa John’s fired Laundry Service the day after the call took place, but still owed the media agency about $1.3 million. Schnatter said that the agency requested $6 million “because they claimed some of their people had been offended by what I had said” and that one of their attorneys threatened “a smear campaign” if Papa John’s didn’t pay up. He said the company ultimately paid Laundry Service $2.5 million.

Added to Schnatter’s previous actions, both Papa John’s and Laundry Service are feeling the heat of a reputational disaster.

Communications and PR strategist David B. Grinberg says:

Schnatter’s failure to follow the crisis communications playbook added fuel to the fire. He should have faced the media via a live press conference. Admit wrongdoing. Apologize to the public. Show heartfelt remorse. Ask for forgiveness. Explain that using the N-word is always wrong, regardless of the context. Talk about life lessons learned regarding race. Express renewed commitment to combat racism. Then pivot to positive messaging.

Laundry Service, which is owned by talent management company Wasserman, has kept its head down since Schnatter’s remarks. Adweek obtained a copy of an internal memo sent to Laundry Service’s employees, which instructed them not to talk to reporters about the incident.

Adweek reported:

“As you all know, there’s been a lot of coverage about Laundry Service and Wasserman related to the Papa John’s situation in the past several days,” the note begins. “The disparaging and outrageous comments about Wasserman and Laundry Service that have been covered are completely false and we have a centralized PR strategy to go on the record and refute them. Until that time we cannot expect the media to know the truth.”

The note tells employees to defer to a third-party PR firm if a journalist should reach them by phone or in writing, advising them to avoid even providing a “no comment” response.

“To this end there are a lot of journalists making inquiries about Papa John’s and Laundry Service, and those inquiries should continue be referred to our corporate public relations representative, Melissa Zukerman,” the note reads.

It concludes: “All matters pertaining to Laundry Service, Cycle, Wasserman and their clients are strictly confidential and should not be disclosed to anyone outside the company.”

However, some communicators are criticizing the agency for not challenging the allegations earlier.

MediaPost.com staff writer Richard Whitman wrote:

On behalf of all Adland, thank you Laundry Service, for finally stepping up and defending yourself and effectively the entire industry. What took you so long?

… Anyone in their right mind would have immediately called BS on Schnatter, who made the accusations last Friday in a local TV interview in Kentucky.

… Advertising has never been high on the trust scale in consumer polls and this fantasy concocted by Schnatter certainly doesn’t help. Even the company that he founded and which subsequently shoved him out told him to put a cork in it after his interview last Friday.

So thanks again Laundry Service for stepping up and saying what was pretty much obvious from the moment the words issued from Schnatter’s lips.

Though some are calling for Laundry Service to be more proactive and vocal, others are advising Papa John’s to do the opposite.

PR pro Deanna Tomaselli wrote in her blog, Pretty in Pittsburgh, that Papa John’s should “be quiet and make pizza.”

Tomaselli wrote:

… [A]nything Papa John’s does right now in that light (sensitivity training, donating to a cause, etc.) would just look totally obvious right now. Obvious that they’re trying to put lipstick on a pig and distract. Instead, they can talk to their employees internally and do business as usual. Keeping a low profile is key.

… In the late 1990s and early 2000s, Subway was killin’ it. Reason being? Their weight loss marketing and super awesome success story-turned-pitchman Jared. But then we all know what happened next and Jared went from sweet Subway guy, to the worst human creep ever overnight when news broke on his child pornography charges. Subway was quick to respond with simple posts on its social pages saying it no longer had a relationship with Jared, and they had no further comment. And that was it. Nothing else. They moved on without getting stuck in the weeds. And now when we think of Subway, we hardly think of Jared.

What would you advise Laundry Service to do next, PR Daily readers? What advice would you give to Papa John’s communications team?

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