For those who wondered last week if things could possibly get any worse for Subway in the wake of spokesman Jared Fogle’s conviction of child pornography and prostitution charges: It’s gotten worse.
In news that, honestly, can’t do any more harm to his reputation, Jared Fogle’s nonprofit organization has been revealed to be a sham. Of the millions of dollars promised in aid to local education and community projects across America, USA Today reports that “the foundation spent just $73,000 a year on average. Sixty percent of the money went to the executive director’s salary, and 26% is unaccounted for, according to foundation tax records.”
Worse, the Jared Fogle Healthy Lifestyle Nationwide School Grant Program has not paid its annual $5 registration fee to the state of Indiana for seven years.
And that’s the “good” bad news for Subway. New charges that will make the chain wish for the days when it was only accused of using yoga mat chemicals in its bread, as claims surface that Subway was warned more than once of Fogle’s sexual attraction to children—but allegedly did nothing.
“One found out I used to serve Jared," an employee at the Subway said. "He asked me to sign a napkin.” http://t.co/Th6Z74OCqI
— Danielle Paquette (@DPAQreport) August 25, 2015
Last week we asked why it took so long for Subway to fire Fogle after allegations of questionable behavior were revealed as early as 2007. Now we might find out that Subway is investigating itself as allegations are made that at least two whistleblowers reached out to Subway as early as 2009.
Business Insider reports that a Subway franchisee said she informed Subway’s corporate team of “Fogle’s sexual interest in children” in 2009. And Rochelle Herman-Walrond, the journalist who cooperated with authorities for years and wore a wire to collect damning evidence that led to his downfall, also said she reached out to Subway with her concerns to no avail.
The franchisee said she shared Fogle’s lurid text messages with Subway and asked that she be allowed to remove all Fogle-related advertising from her store:
“The woman claims she contacted Subway’s corporate office regarding the issue, and she requested that Subway allow her to remove all marketing related to Fogle from her store, according to the lawyer. She met with two levels of management, shared the messages with them, ‘and specifically requested not to have his imagery and merchandising related to him in her stores,’ the lawyer said. ‘She also specifically warned them that he should not be interacting with young people.'”
The Business Insider report expands on similar claims the franchisee made several weeks ago.
Subway’s response was the worst possible response: The brand claims it “found no record that this was ever brought to our attention.” But now that there is another claim the chain was notified, Subway says it has “began an investigation that is ongoing.” In other words, it depends upon what the meaning of the word “found” is.
Subway may now be less willing to deny deny deny with more than one report that the brand was informed—and consumers want to know. At least one newspaper has already published an op-ed: “Find out what Subway knew, too.”
The charges are so grotesque and Fogle’s connection to the brand so strong that, from a purely PR perspective, it’s understandable why Subway might stonewall. Drag out the investigation until Fogle is no longer top news and then dump a report about a rogue executive or two who acted alone and irresponsibly. Shift the responsibility off the brand and onto some individual scapegoats, followed by a statement of sorrow for the victims and disgust for the actions of a few individuals who do not represent Subway’s brand values. Just wait, it’s coming.
As Chernobyl-like as the Fogle meltdown is, the case should raise a larger question for brands about brand spokespeople. It is clear there is a great deal to be gained when brands associate with the stories of popular celebrities. But case studies might show that over time, the risk-reward curve bends away from the latter toward the former.
Jared. Lance. Tiger. Moss. Trump. All spokespeople identifiable from a single name, all spectacular liabilities in the end. Scandals are bound to happen, but not to every spokesperson. But it is the responsibility of brands to be prepared for a scandal, and to see and treat accusations or questions about those spokespeople as accusations or questions about the brand itself.
A final word of advice for brands determined to partner with (or create) celebrities: Treat spokespeople like stock market investments and diversify. The reason Nike thrives despite constant spokesperson scandals and disappointments is diversification. The reason Subway is struggling to get past Jared is that his was the only real face the brand has ever had.
Subway has officially severed all ties with spokesman Jared Fogle, but the chain's problems don't end with him. http://t.co/ighhZBEXcr
— Marketplace (@Marketplace) August 22, 2015
It’s good for Subway that human beings have short fuses but terrible attentions spans. If the brand can weather the jokes and the disdain while removing all ties to Fogle from its messaging, it’s likely the Jared fiasco will be an embarrassing but harmless footnote in the brand’s history—think Hertz and OJ Simpson—but only if Subway can address its core business problem: People increasingly don’t like the brand’s food. and its fortunes have been falling even before Fogle was revealed to be a pedophile.
And for good measure, a Twitter user points out a now ironic billboard from Subway’s advertising history:
— Stephen Dorian (@KCDorianGray) August 25, 2015