Papa John's to stop using founder Schnatter's image in marketing campaigns

PZZA data by YCharts

Wednesday, John Schnatter, founder of Papa John's, resigned not only as the chairman of the pizza giant but also gave up his seat on Louisville's Board of Trustees after he acknowledged that he used the N-word during a business conference call this past May.

Mr Schnatter quit as chief executive previous year after criticising the NFL over players' national anthem protests.

When the news of the call broke this week, shares in the pizza chain plummeted by 5.9 per cent, wiping $96.2million off its market value, and Schnatter announced he would resign as chairman. In addition to appearing in TV ads, Schnatter's image is on packaging and at the centre of a logo that is all over the company's website.

Two current Louisville football players and one future Cardinal used their social media platforms to react to the recent news surrounding surrounding John Schnatter.

Companies can leverage great personal stories to connect with customers, said Keith Hollingsworth, a professor at Morehouse College's business department.

"Over the last 24 hours, our community has been fractured by the comments made by former UofL trustee John Schnatter", Bendapudi said in a statement.

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Papa John's, which has featured founder John Schnatter as a spokesman in logos and TV ads, has begun pulling his image from its marketing and pledged to assess its diversity practices in response to his use of a racial slur.

Schnatter, a Trump donor, who has resigned from three high ranking positions in the past six months as a result of racist remarks, on Wednesday admitted to using the slur during a conference call in May. He apologized to her, adding that he didn't want to be a "distraction", she said. The Kansas City Royals also stepped away from Papa John's, as did the Miami Marlins and Tampa Bay Rays.

Earlier this week, Schnatter used the n-word in a conference call orchestrated by a PR company created to prevent future PR screw-ups.

Papa John's stock is up almost 3% Friday on the news. Schnatter subsequently issued a statement acknowledging the use of "inappropriate and hurtful" language.

The company can not afford to alienate customers, with sales already under pressure from rivals such as Domino's.

And Major League Baseball has indefinitely suspended its "Papa Slam" promotion with Papa John's, Yahoo Sports reported. Today, it has more than 3,400 locations in North America.

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