Dive Brief:

• Papa John's confirmed to Ad Age that it will no longer feature its founder and former CEO John Schnatter in its marketing or branding following controversial comments made by the executive. Forbes reported last week that Schnatter used the "n"-word during a conference call in May. Schnatter later apologized and resigned as chairman of the board on July 12. 
• Schnatter used the obscenity and made other racist comments during a call with Papa John's marketing agency Laundry Service, which has since resigned from the company's account. A new agency has not yet been named. Olson Engage, which won the company's PR account in February, also resigned, citing "recurring differences" with the founder over how to deal with the controversy. IPG's Initiative, Papa John’s media agency, said it will continue working with the brand, per Ad Age. On Friday, the University of Louisville also announced plans to remove the Papa John's name from its football stadium; Schnatter also resigned his position as chairman of the University of Louisville Board of Trustees. 
• Schnatter stepped down as CEO of Papa John's in January following controversial comments made about the NFL anthem protests. Papa John's has a license agreement around the use of Schnatter's name, likeness and image, but noted in a 2017 annual filing that its "business and brand may be harmed if Mr. Schnatter's services were not available to the company or the reputation of Mr. Schnatter were negatively impacted," per Ad Age.  

Dive Insight:

It's hard to tell how Papa John's will recover from the fallout over Schnatter's comments, especially since the founder has been so central to the company's name and branding. Schnatter was also once a fixture of its advertising but has appeared less since stepping down as CEO. Six ads featuring Schnatter have run in 2018, the last on May 22, during a broadcast of NHRA Drag Racing: Southern Nationals, according to Ad Age. 

But outside of a few lingering appearances from Schnatter, Papa John's has attempted to find a newer brand identity in recent months, including by focusing more on e-commerce and bringing on the digital-first agency Laundry Service as its creative agency of record in November. At the time, Brandon Rhoten, who previously had a successful stint marketing for Wendy's, was Papa John's global CMO, but Rhoten was ​pushed out of the pizza brand in May, after less than a year on the job. 

Outside of executive shuffles, Papa John's has faced other business struggles. The company ended its partnership with the NFL as the league's official pizza sponsor in March, with rival Pizza Hut quickly stepping in to fill the role. Papa John's has also seen sales decline over the past couple of years — Schnatter stepped down as CEO in part due to pinning poor business results on the NFL anthem protests — and has lost some its competitive edge with Pizza Hut and Domino's. 

At press time, Schnatter's likeness is still featured on some Papa John's logos, pizza boxes and other materials, though it was absent from an open letter by Papa John's CEO Steve Ritchie posted online on July 13 addressing the controversy and the brand's commitment to "diversity, equity and inclusion" going forward.