Papa John's, which has featured founder John Schnatter in logos and TV ads, is removing his image from its marketing materials after reports that he used a racial slur.
His face had disappeared from at least some of the materials as of Friday morning, though the company said the details and exact timing of the move were still being worked out. The Louisville, Ky.-based pizza chain said Friday that there were no plans to change its name.
Schnatter has long been the face of the brand, and the company has acknowledged in regulatory filings that its business could be harmed if Schnatter's reputation was damaged. Papa John's got a taste of that last year, when Schnatter stepped down as chief executive after he blamed disappointing pizza sales on the outcry surrounding football players kneeling during the national anthem.
This week, Papa John's was already trying to further publicly distance itself from Schnatter after Forbes reported that he had used the N-word during a conference call in May. Schnatter apologized and said he would resign as chairman. That prompted the company's stock to recover some of the losses it suffered after the report, but shares edged down 0.2% to $53.55 on Friday.
Schnatter remains on the board and is still the company's largest shareholder, with nearly 30% of the stock.
In addition to appearing in TV ads, Schnatter's image has been on packaging and at the center of a logo that usually was all over the company's website.
Keith Hollingsworth, a professor at Morehouse College's business department, said keeping Schnatter on marketing materials would be a signal to people that the company does not have a problem with his comments or that it didn't think they were a big deal.
“Five years from now, they might be able to start bringing him back. But at the moment, you have to be very decisive and show you take this very seriously,” Hollingsworth said.
Schnatter used the slur during a media training exercise in May, Forbes reported this week. When asked how he would distance himself from racist groups, Schnatter reportedly complained that Colonel Sanders never faced a backlash for using the N-word.
Schnatter subsequently issued a statement acknowledging the use of “inappropriate and hurtful” language.
“Regardless of the context, I apologize,” the statement said.
The fallout from his comments continued Friday. The University of Louisville said it will remove the Papa John's name from its football stadium, and that it will rename the John H. Schnatter Center for Free Enterprise at its business college. Earlier in the week, the school said Schnatter resigned from its board of trustees.
And Major League Baseball has indefinitely suspended a promotion with Papa John's that offered people discounts at the pizza chain after a player hit a grand slam.
Papa John's began operations in 1984 and has more than 5,200 locations globally. For the first three months of this year, the chain said a key sales figure fell 5.3% in North America.