How Business Fraud Led Julia McGuffey to an IP Career

Her husband’s experience with fraudulent business practices led Julia McGuffey to law school and eventually to her role as corporate counsel at Papa John’s

Photos by Clay Cook

Malcolm X said, “There is no better teacher than adversity.” There may be no better example of someone who took that to heart than Julia McGuffey. After earning an undergraduate degree in psychology from the University of Kentucky, McGuffey enrolled in a doctoral program in clinical psychology at Florida State University, but soon realized it wasn’t a good fit. Her husband, Keith McGuffey (aka Trey D), was working as a singer-songwriter, so she decided to stay home and take care of their two young children.

Along the way, Keith signed with Lou Pearlman and Trans Continental Records, the same manager and record label as the Backstreet Boys, NSYNC, and several other popular bands. However, Pearlman was embezzling funds and ended up being sued by all the bands for misrepresentation and fraud. He lost all the cases and was later convicted of money laundering, conspiracy, and running a Ponzi scheme that defrauded investors out of more than $300 million. He was sentenced to 25 years in prison.

The experience was a wake-up call for McGuffey. “To see someone get cheated out of money he deserved was very upsetting,” she says. “The contracts were so shady that he ended up not owning any of the songs he wrote or even his stage name.” She decided to go to law school at the University of Louisville’s Brandeis School of Law and focus on intellectual property, copyrights, and trademarks.

Julia McGuffey, Director of Intellectual Property, Papa Johns

McGuffey clerked at the Louisville Gas & Electric Company and Kentucky Utilities Company during and after law school. She then landed a job as an associate at Middleton Reutlinger, where she continued her focus on IP and trademarks. “We helped a young man trademark a video game called Terraria. It became insanely popular, turning him into an overnight millionaire. That was really exciting,” she says.

Though she wasn’t looking, one day she received a LinkedIn notice about a job opening at Papa John’s. “The job description read like it was made for me,” she says. It was a no-brainer and she applied right away.

She started in August 2014 as an associate attorney. Six months later, she began supporting the marketing department. “We handle all of the department’s legal needs, which includes reviewing commercials and print ads, managing and protecting our trademarks, reviewing contracts, and negotiating sponsorship agreements,” she says.

The knowledge required is not just legal. “There are lots of regulations you must adhere to in the food industry,” McGuffey explains. “For instance, if you want to use the words ‘taste’ or ‘better’ in an ad, you must have conducted actual taste and comparison tests. If you want to use the word ‘fresh’, you must meet certain standards established by the FDA.”

“‘Natural’ is another tricky one,” she adds. “The FDA hasn’t come up with a good definition of what it means, so I advise our people not to use it until they do.”

To illustrate the seriousness of word choices, McGuffey recounts a case a few years ago when a company claimed to use 100 percent cheese in a newly introduced menu item. They ended up losing a class-action case when it was found that the cheese included a starch additive or filler. “They probably didn’t intend to mislead anyone, but the court ruled against them because they had used another ingredient. All sorts of things will raise red flags, so it’s best to err on the side of caution,” McGuffey says.

To stay on top of the latest rules, McGuffey attends conferences, many of which are designed specifically for lawyers involved in the advertising industry, and turns to seasoned outside counsel whenever necessary. “I also get summaries of court cases and FTC rulings and letters. I don’t know how people practiced before the internet,” she laughs.

These days, McGuffey is also busy helping with the overhaul of the company’s public image. Ever since its founding in 1984, the company has featured founder John Schnatter in all of its marketing materials. With his resignation from the CEO role in December 2017 and from the Chairman of the Board position in July 2018, the marketing department has redesigned almost everything.

“We’re creating a whole new voice for print ads and TV commercials,” McGuffey explains. “Now we’re focusing on lots of people—employees, franchisees, vendors, and customers. In fact, one of our new slogans is ‘Better Together.’”

Of the company’s 5,200 locations, 70 percent are franchisee owned. “Most of the franchisees have owned their stores for years and are big philanthropists in their communities,” McGuffey observes. “It’s been exciting getting to know their stories and helping publicize the good that they do. It turns out that our best ingredients are our people.”

To further strengthen the company’s relationship with franchisees, McGuffey has helped develop company-wide social media guidelines. “It covers what you can and can’t say, but we have to update it regularly because things are constantly changing. One company, Duane Reade, posted a photo on Twitter and Facebook of actress Katherine Heigl carrying one of its shopping bags. She sued them for $6 million, since they used her image without her permission and implied her endorsement. She withdrew the claim after agreeing to a confidential settlement with the company. Sometimes seemingly innocuous things can cause big problems.”

To make it as simple as possible, McGuffey and the social media team have color-coded the guidelines. Green means go/OK; yellow means you should get legal’s input first; and red means you should never do this. “People have to be careful what they post,” McGuffey says. “Everyone needs to tread very lightly in this new digital age.”