Papa John’s boosts marketing, brand spending and franchisee support by $80 million
Papa John’s International is putting an additional $80 million into marketing and increased financial support for U.S. franchisees, citing a need for investment in the brand.
The announcement of the $80 million injection comes as the chain continues to try to recover from steep sales declines stemming largely from the fallout over comments made by its founder, John Schnatter, who is no longer an executive or board member.
Papa John’s North American same-store sales decreased by 6.9 percent in the first quarter, after falling 10.5 percent for all of 2018.
Papa John’s says it will invest the additional funds in programs starting in the third quarter. The plans include making “significant, additional contributions” to its national marketing fund as it tries to boost the power of its brand message, which is now starting to be delivered by its new ambassador, investor and operator Shaquille O’Neal. Papa John's also has a new executive leading its brand strategy; Karlin Linhardt joined as global chief marketing officer earlier this year.
Papa John’s long featured founder Schnatter in its marketing, showcasing him in commercials, on the logo and even on pizza boxes, leaning on the story of the chain he started in 1984. After Schnatter’s use of the n-word on a media training call came to light in July 2018 in a Forbes story, Schnatter stepped down from the chairman post and later exited the board.
The $80 million investment announced Wednesday comes after Papa John’s in 2018 contributed $10 million to the national marketing fund and offered about $15.4 million in financial assistance to U.S. franchisees, through efforts such as short-term royalty reductions, to help those whose businesses have been struggling. It also offered nearly $4.9 million in short-term royalty reductions in the first quarter of this year.
The company said it will extend financial assistance to its U.S. franchisees through lower royalties, royalty-based service incentives, and what it called targeted relief. The franchisee support is set to end in 2020, Papa John’s said.
Papa John's has featured several franchisees, store managers and others in its advertising as it began its recovery plan. Now it plans to promote itself with O’Neal, although campaign details were not shared in Wednesday’s announcement. Papa John’s works with Endeavor Global Marketing and Havas Media.
Earlier this week, Papa John’s announced that O’Neal selected design details for one of the Atlanta restaurants he’s investing in. The remodeled location features O’Neal’s signature on the front door near his size 22 footprints. Even the phone number for the shop, located on Georgia Tech University’s main campus and near the TNT Studios where O’Neal appears during the NBA season, got a makeover. It’s now “444-SHAQ.”