Papa John, Weinstein, Wynn: The danger of brands named after people

Thu, Jul 12, 2018, 9:55 AM

According to a Forbes story on Wednesday that Schnatter did not deny, he used the n-word on a conference call in May. Ironically, the purpose of the call, with a marketing agency called Laundry Service, was to train Schnatter to prevent additional PR gaffes. Schnatter reportedly complained on the call that, “Colonel Sanders called blacks n*****s” and was not publicly criticized, while Schnatter took major heat for his comments about NFL players.

Schnatter’s debacle started last November when, on an earnings call, he blamed Papa John’s flat sales on the NFL player protests. “The NFL has hurt us by not resolving the current debacle to the players’ and owners’ satisfaction,” Schnatter said. “NFL leadership has hurt Papa John’s shareholders.” He added that the player protests “should have been nipped in the bud” by the NFL when Colin Kaepernick first started kneeling during the anthem.

The comments sparked a backlash and led many consumers to say they were done ordering from Papa John’s. Soon, the website The Daily Stormer was christening Papa John’s “the official pizza of the alt-right.” Competitors piled on: Yum Brands said Pizza Hut was not seeing any sales impact from the NFL protests; DiGiorno mocked Papa John’s in a viral tweet.

Schnatter’s public downfall is yet another example of the danger for brands that are named after their founders.

John Schnatter in Louisville, Ky., on Oct. 18, 2017 (L), Harvey Weinstein in New York on June 5, 2018. (AP Photo/Timothy D. Easley; Steven Hirsch/New York Post via AP)

When an athlete or celebrity suffers a public scandal, like an arrest or racist rant, sponsors can simply cut ties. When it happens to a high-ranking executive, the employer can simply fire them.

But what’s a brand to do when the wrongdoer is the name and face of the company?

Papa John’s is named for John Schnatter. Its logo is an image of his face. Now onlookers wonder whether the brand will change its name. Papa John’s did not respond to a request for comment on Thursday.

Papa John’s press release, Jul. 11, 2018

To be sure, it is not so obvious that naming a company after its founder is a bad idea. As the Harvard Business Review noted last year, two different academic papers on the subject had opposite findings: one found that eponymous companies generate 3% higher returns than other companies, while the other paper found that eponymous companies are 8% less valuable than other companies.

Harvey Weinstein

The Weinstein Company faces the same issue. Last October, just one week after the first New York Times story published reports of Weinstein’s decades of harassment, the company said it was considering a name change.