• by Richard Whitman , Columnist, July 19, 2018

If there was any doubt that the agency world believes Papa John’s is a toxic client to work for it was dispelled today when a fourth agency resigned the business.

Initiative, part of Interpublic Group, resigned as the pizza chain’s media shop. In the past few days three different shops have resigned their assignments. Yesterday, Fallon, which had  done about a month’s worth of creative work called it quits in the wake of the pizza chain’s scandal, which apparently goes much further than former CEO and chairman John Schnatter’s using racist language during a conference in May.

In an explosive report posted just hours ago, Forbes reported that “Schnatter’s alleged behavior ranges from spying on his workers to sexually inappropriate conduct, which has resulted in at least two confidential settlements.”

Initiative’s decision to bail came in the wake of the Forbes report. The agency issued a statement from Amy Armstrong, U.S. CEO:  

“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. 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. We have since informed the client of our decision to resign the business.” 

Olson Engage quit the company’s PR account earlier this week and Laundry Service bowed out in May after Schnatter’s use of racist language on a conference call with agency officials.

These decisions aren’t made lightly with a company the size of Papa John’s which spends north of $200 million annually on measured media according to Kantar Media.

Forbes did an exhaustive exposé interviewing 37 current and former employees of the company. But who knows what else might be unearthed in the days and weeks ahead regarding Schnatter’s behavior, or perhaps the behavior of others at the company.

Agencies have enough problems. It’s no secret how tough the business has become in terms of making a buck.  It took guts to quit a client of that size, although there probably wasn’t an alternative when you consider the value of integrity.

It’ll be interesting to see what shops, if any fill the gap, as the scandal plays out.