Papa John's founder-driven public-relations nightmare reminds branding experts of Uber's 2017 fiasco

papa john's John Schnatter

Branding experts see parallels between what happened at Papa John's leading to its chairman John Schnatter's resignation this week and how the crisis that changed leadership at Uber unfolded in 2017.
Both exits, for one, occurred after the leaders were involved in a series of missteps.
Schnatter and Uber's Travis Kalanick also were both highly visible founders inextricably linked to their companies and their brands.

Papa John's may be the latest brand weathering a public-relations crisis, but branding experts view the situation simply as yet another case of déjà vu.

Specifically, it reminds them of Uber.

They see parallels between what happened at Papa John's leading to John Schnatter's resignation as chairman this week and how the Uber crisis unfolded in 2017, ultimately leading to the ouster of its founder and CEO, Travis Kalanick.

Schnatter, the founder and former CEO of Papa John's, resigned as chairman of the company on Wednesday after admitting to using the N-word in a company conference call. The incident occurred on a conference call with the advertising agency Laundry Service in May, Forbes reported.

But it wasn't the first time that he — and by extension Papa John's — was at the center of a public maelstrom.

Like Uber, Papa John's CEO kept creating his own messes

Papa John's entered a polarizing debate in November when Schnatter, then the company's CEO, slammed NFL leadership over players' kneeling during the national anthem to protest racial injustice and police brutality.

The comments garnered backlash on the left and support on the right, and the chain eventually killed its sponsorship deal with the NFL.

Similarly, Kalanick's departure from Uber was not prompted by a one-off incident but a spate of crises over several months — including allegations the company culture allowed sexual harassment and discrimination, concerns about privacy and data, and a leadership overhaul.

"This is like déjà vu," said Chris Allieri, the founder and principal of the brand consultancy Mulberry & Astor. "In both cases, it was a series of actions, statements, and on- and off-the-record accounts of how they acted, led, and carried themselves."

The similarities don't end there. Both Kalanick and Schnatter were not just the founders but also the highly visible public faces of their companies. They were inextricably linked to their brands — particularly in the case of Schnatter, who was the literal face of the marketing campaigns at Papa John's.

That meant their every action would directly affect their brand's perception. They were also both outspoken figures who at times courted controversy. And that ended up coming back to bite them.

"Schnatter should have learned both from his prior experience with the NFL and from the negative impact on Uber's brand of former CEO Travis Kalanick's fall," said Nick Peters, a senior vice president at CommCore Consulting. "In today's media and social-media environment every C-Suite executive must be careful to anticipate that anything they say may be repeated in public, often to their detriment."

And of course, both situations ended up taking a toll on the brands.

Uber's controversies hit the brand hard, and Papa John's is likely to suffer for a while

American consumer favorability of Uber hit a record low in June 2017, according to the brand-survey firm Morning Consult Brand Intelligence, with just 40% of 40,000 respondents having a favorable impression of the brand. Online conversations around Papa John's, similarly, were as high as 78% negative the day Schnatter resigned, according to data by Brandwatch, with the hashtag #BoycottPapaJohns garnering over 4.3 million impressions.

Still, all is not lost for Papa John's. Schnatter's exit may seem like a big blow, but it's not the end of the road for the brand. Several high-profile companies, including Wells Fargo, Volkswagen, and, of course, Uber, have recovered just fine after having executives leave during times of crisis.

Plus, Papa John's seems to have taken a cue from Uber's missteps, with Schnatter's exit coming much sooner after the inciting incident than Kalanick's did. That sends a signal the company is serious about fixing things, experts say, and may just be the first step that it needs to take to reinvent itself — even though it no longer has a public-relations agency to guide it forward.

"When an organization's leader behaves in a way that isn't aligned with the stated values of the organization and its brand and culture, it creates confusion in the marketplace and repels customers," said Deb Gabor, the CEO of the brand-strategy consultancy Sol Marketing. "Having Schnatter exit his chairman role is about the only choice Papa John's has in avoiding the brand becoming a raging dumpster fire."

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