IPG Mediabrands-owned media agency Initiative said Thursday afternoon it is resigning the Papa John's business, after originally saying it would continue to work with the struggling pizza chain amid controversy around its founder John Schnatter.
With Initiative dropping the business, Papa John's now has no media, creative or PR agencies of record. (UPDATE: Powell Tate, a specialty public affairs unit of IPG's Weber Shandwick, is working on communications strategy for Papa John's, the agency said Thursday evening.)
Amy Armstrong, the agency's U.S. CEO, said in a statement that although Initiative had originally agreed to continue as the pizza chain's agency, it reversed course because "additional information" had come to light.
Earlier on Thursday, Forbes published a widely-shared story titled "The Inside Story Of Papa John's Toxic Culture." That report came just over a week after a Forbes article revealed that Schnatter had used the "n-word" during a training call in May with Laundry Service, Papa John's creative agency at the time.
"Last week, Initiative agreed to continue as Papa John's agency, based on direct assurances from the company's CEO that an egregious, recent incident that had been in the news was isolated to their founder, and not representative of their corporate culture," Armstrong said in an emailed statement to Ad Age. "We were also told that the company would make significant investments in programs to promote a more inclusive workplace. These assurances, as well as the swift departure of the founder, were discussed at an agency town hall meeting, at which we collectively decided to continue working with the client, in order to support their commitment to doing better."
"This morning, additional information has come to light that calls into question those assurances and indicates broader cultural issues that run directly counter to our own values," the statement continues. "We have since informed the client of our decision to resign the business."
"Initiative has a talented team and we wish them the best," Papa John's said in a statement. The company's comment was nearly identical to the one it issued when commenting Wednesday on the departure of creative agency Fallon, which worked on the account for about a month.