Fronting The Brand

Continuing A Theme—Number 5

The brand may be critical to the success of a business, and companies go to lengths to protect theirs. A company’s brand distinguishes their product from the crowd, and brand loyalty is critical to repeat business. What happens when you cloud your brand with your personal predilections? Examples abound. Take the case of Papa John’s CEO John Schnatter:

Papa John’s CEO Steps Down Following Controversial Remarks On NFL

December 22, 20171:39 AM ET 

John Schnatter, the founder of the Papa John’s pizza chain, will step down as CEO in the wake of controversial comments he made last month about the NFL’s handling of the anthem protests.

Schnatter will be replaced on Jan. 1 by the company’s chief operating officer, Steve Ritchie. Schnatter will remain chairman of the board.

The 56-year-old founder of the chain came under fire after remarks he made during the company’s third-quarter earnings call. He said Papa John’s — a National Football League sponsor and advertiser — had been “hurt” by the “take a knee” protest led by African-American players to draw attention to police brutality.

To be sure, Schnatter is a staunch conservative, his credentials being sterling:

In 2012, Papa John’s and Schnatter received media attention after he made critical comments about the Affordable Care Act to a class on entrepreneurship.

Schnatter hosted a fundraiser at his home for Republican Party candidate Mitt Romney in May 2012.

Schnatter contributed to Donald Trump’s 2016 presidential campaign and made supportive comments about his administration in January 2017.

In October 2017, in a conference call with investors, Schnatter blamed the National Football League for poor financial performance, stating “The NFL has hurt us . . . We are disappointed the NFL and its leadership did not resolve this,” referring to the U.S. national anthem protests. Later that day, Papa John’s announced that the NFL shield or “official sponsor” designation on Papa John’s commercials and advertising would be removed.

On December 21, 2017, CNBC and The Associated Press reported that Papa John’s announced that Schnatter would be replaced as Chief Executive Officer effective January 1, 2018 by Chief Operating Office Steve Richie. Schnatter, who appears in the chain’s commercials and on its pizza boxes, and is the company’s biggest shareholder with approximately 9.5 million shares, will remain chairman of the board.

Ordinarily there would not be anything wrong with being politically conservative and proud of it. However, in most recent times American conservatism has taken an ugly turn, finding favor with racists, xenophobes, Christian extremists, and the anti-gay faction. Papa John’s mistake has been to publicly associate his brand with the political right:

Papa John’s CEO’s comments spark protests

Mark Fisher-Staff Writer

Updated 6:18 p.m Thursday, Nov. 15, 2012 Filed in News

America’s deep philosophical and political divisions following a divisive presidential election are prompting dueling protests involving of one of the nation’s largest pizza chains.

The controversy began with comments made by Papa John’s owner John Schnatter that he would raise prices and cut employees’ hours to pay for costs associated with the Affordable Care Act, also known as Obamacare. Those comments prompted calls for a boycott, which in turn triggered a call for a Papa John’s Appreciation Day today.

“Papa John’s has been targeted by the left for a boycott, for simply articulating that ObamaCare would hurt profits and force cutbacks in employee hours,” says the “National Papa John’s Appreciation Day” Facebook event page. “Stand up to this nonsensical and illogical action and support Papa John’s this Friday!” More than 17,400 Facebook users had indicated they were “going” to the Papa John’s event as of late Thursday afternoon.

Schnatter apparently learned too late that when you seek to divide your customer base you are drilling toward losing half of it. It’s a lesson impressed on others, including Chick-fil-A and Hobby Lobby. These latter two are privately owned concerns, and each impresses its fundamentalist Christianity on its brand. A result is I have friends (many) who will never set foot in either. Full disclosure: I never set foot in either from the outset.

Has the NFL been damaged by players who kneel instead of standing? President Trump seems to think so. All right, he may not actually think so, but he does say so:

…NFL attendance and ratings are WAY DOWN. Boring games yes, but many stay away because they love our country. League should back U.S.

Full disclosure: I have never attended an NFL game, nor have I ever watched one from beginning to end on TV.

Summarizing, a major factor with Papa John’s is that it is a publicly held company, and its CEO’s first concern must be to stockholders. Meaning the CEO must not ride on the company brand to forward his private preferences. John Schnatter has only recently become aware of this distinction.

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