Jared Fogle Child Porn Subway Scandal: PR Disasters And How Companies Can Recover From Them

Subway took less than 140 characters to make its stance clear after its spokesperson Jared Fogle was charged with soliciting sex with minors and possessing child pornography. “We no longer have a relationship with Jared and have no further comment,” it tweeted Tuesday evening. In the age of the Internet, companies have to be especially careful when dealing with scandals that risk metastasizing into full-blown disasters, public relations experts said.

Subway is hardly the first company to endure scandal after a celebrity spokesperson has been accused of or charged with committing a crime. Whether brands can recover from bad press largely depends on the company’s reaction and the nature of the charges. Usually, with time and the right approach to damage control, brands can bounce back -- as long as they are not found to have been aware of, or complicit in, the dirty deed.

"There’s really two types of crises," Eric Dezenhall, a public relations and communications consultant who is an expert in crisis management, said. One is where a company appears to have knowingly and willfully done something wrong, or condoned such behavior. The other is where the company is somehow linked to an external crisis. In the latter situation, such as the one Subway has now found itself in, "you sever ties, you make a statement, and you get back to business," Dezenhall said.

The possible outcomes in such situations can range widely. In 2013, the cancer research foundation Livestrong cut ties with cyclist Lance Armstrong after he admitted to using performance-enhancing drugs. Armstrong founded the organization and was always closely associated with it. But it was different for Kate Moss. In 2005, when photos emerged of the supermodel snorting cocaine, clothing company H&M initially dropped her from an advertising campaign before deciding to give her a second chance.

Other prominent figures have lost endorsements over questionable behavior and activities. The Food Network, Smithfield Foods and Wal-Mart dropped celebrity chef Paula Deen and her food products after she acknowledged in 2013 that she had used racial slurs. In 2009, pro golfer Tiger Woods admitted that he cheated on his wife with multiple women. Not long after, he lost contracts with Gillette, AT&T and Gatorade, among others. After Los Angeles Lakers guard Kobe Bryant was accused of sexual assault in 2003, McDonald's decided not to renew a sponsorship contract, but Nike kept the $40 million, four-year contract signed the month before the charges were leveled.

In other situations, companies have taken their time distancing themselves from spokespeople charged with crimes. In 1994, the rental car company Hertz ended a nearly 20-year relationship with its celebrity representative, O.J. Simpson, after he was charged with murder. The company and the former football star had partnered since 1975, producing ads that significantly benefitted both of them. However, the company did not cut ties with Simpson after he was charged in 1989 with assaulting his wife. It took murder charges to finally sever the tie.

A year later, in 1995, Bloomberg reported that Hertz was doing well, revenue-wise, even though it avoided assessing the fallout from the highly publicized Simpson trial on its business. "Regrettably, O.J. Simpson is as highly identified with Hertz as he is with football,'' Joseph Russo, Hertz's vice president of public affairs at the time, told Bloomberg. The bigger problem for Hertz, however, was figuring out how to compete with other car rental companies offering new services, vehicles and getaway packages.

That was 20 years ago. In the age of social media, preventing or overcoming a PR disaster can be a lot more challenging.

"Volume, velocity and venom" are the three words Dezenhall used to explain why corporations and their public images today are particularly vulnerable to controversy. On the Internet, a lot of information travels very quickly, even uncontrollably, he said. And because that information tends to be negative, it flies further and faster than anything exculpatory.

Under Subway's current circumstances, it has an advantage given the fact that the public seems unlikely to believe the sandwich chain was complicit in or knew about Fogle's alleged crimes, Dezenhall suggested. "Nobody really believes that Subway as an organization has anything to do with child pornography," he said. "I think that they will get out of this rather quickly."

But as far as scandals go, the alleged crimes with which Subway's spokesman has been linked are particularly morally repugnant, noted Martin Waxman, who runs his own social media and communications firm in Toronto. As a result, the company needs to tread carefully.

"When it’s something like child pornography, any brand should be very, very concerned about what the potential fallout could be for the brand," Waxman said. "It’s impossible to check everything and know everything about a person when a brand is working with a spokesperson. But when something goes wrong, it's important for brands to admit there was an error early on," he added.

Subway suspended its relationship with Fogle in July, when his home was raided in connection with a child pornography investigation into an employee at Fogle's foundation. It officially cut ties with Fogle Tuesday. "That’s really all they can do right now," Waxman said.

For Subway, a bigger problem might be sales, which were falling rapidly even before the Fogle scandal broke. Earlier this year, it dropped from America’s second-largest restaurant chain to third place, and sales decreased by 3 percent, or $400 million, in 2014. The decline has been attributed to the rise of more popular fast-casual food chains that are beating Subway at its own game, offering meals that at least appear healthier, and more gourmet, than Subway.

“The ‘Subway fresh’ has lost its appeal with consumers, because to them fresh has evolved to mean something very different,” Darren Tristano, executive vice president of Technomic, a research and consulting firm for the food industry, told the Washington Post in May.

With the Fogle issue, Subway is hardly out of the woods, as the scandal continues to unfold and new facts emerge. But Dezenhall suggested the company could emerge not unscathed but still intact, if it was careful.

"Less is more in the Internet age," Dezenhall said. "What you’ll always have to remember is that no matter what you do, the pundit class will declare it to have been mismanaged."