Minneapolis-based agency Fallon began doing creative work for Papa John's last month, the agency confirmed Wednesday, but said it has decided to end the relationship following the controversy that began last week.
"In mid-June, Fallon was retained by Papa John's International to create work for the brand," the Publicis Groupe-owned agency said in a statement to Ad Age. "The agency was unaware of the incident with its previous agency and learned about it with the rest of the world. During our short time with Papa John's, Fallon produced limited product-focused advertising that has yet to air. The agency has decided not to pursue additional business with Papa John's."
"Fallon has a talented team and we wish them the best," Papa John's said in a statement to Ad Age.
Last week, news that Papa John's founder John Schnatter used the n-word in a May conference call resulted in his resignation as chairman of the board. The conference call, which was with its agency Laundry Service, reportedly resulted in the breakup between the marketer and its agency.
Laundry Service had been appointed the pizza chain's creative agency of record in October. Before hiring Laundry Service, Papa John's had worked with WPPs Grey.
This past Friday, Papa John's founder John Schnatter accused the pizza chain's former agency of trying to extort him out of $6 million over his use of the n-word on the May call.
Tuesday afternoon, in an internal memo obtained by Ad Age, Laundry Service said "disparaging and outrageous comments about Wasserman and Laundry Service" made in the media regarding its relationship with Papa John's are "completely false" and that it will be going on the record with a response.
Fallon is just the latest agency to distance itself from the brand since the controversy emerged: Papa John's PR firm Olson Engage said it had resigned the account last week, claiming it "had significant recurring differences with their founder regarding the best way to address the controversies and restore and advance the brand's corporate reputation for the good of their workforce and franchisees." Olson Engage had only been on the account since February.
Meanwhile, shares of the No. 4 pizza chain's stock rose in late afternoon trading after the Wall Street Journal reported that Schnatter held preliminary talks with Wendy's about merging the two companies, citing people familiar with the matter.
Papa John's media agency Initiative, though, has opted to stick around: The IPG Mediabrands-owned agency's U.S. CEO Amy Armstrong said last week her agency will continue to work with Papa John's "as a result of the client's appropriate, pro-active response" to the situation.