Abstract

This case describes the struggle of US- based pizza chain Papa John’s International Inc.’s (Papa John) to recover from the PR crisis. In 2018, the troubles for the company began when Forbes reported about the racial slur made by the founder of the company John H Schnatter (Schnatter). Forbes’ article also detailed about the company’s ‘toxic’ culture and a number of deep rooted issues involving Schnatter. Following the controversy, Schnatter had to step down as Chairman of the company. Schnatter could not stop putting his foot in his mouth. In 2017, Schnatter had lost his position as CEO after he set off an uproar by blaming the National Football League (NFL) players for the pizza chain’s lagging sales. His statement led to drop in sales. Further, Marketing partners and consultants were breaking ties with the pizza chain. The numerous allegations against the founder, posed a threat to the company’s image. Struggling to put an end to the fiasco the board of Papa John’s finally decided to ward off Schnatter from the business by adopting ‘poison pill’. Schnatter owned a 29 percent stake in the chain and was trying to take over control of the company. To fight back his position in the company, Schnatter hired a high profile lawyer. It remained to be seen if poison could restore the company’s reputation by distancing Schantter or will Schnatter make his way back into the company.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Identify the Crisis the company was facing.
• Examine what went wrong in the company.
• Contemplate how the company can overcome the crisis.
• Understand the concept of Poison pill.

Keywords

Papa John’s; PR Crisis; Crisis Management; Public Relation; Leadership