The Problem

Business owners have to be prepared for unexpected calamities, but there is no way to plan for what happened to Terry Wyman-Picurro on August 21, 2005. That was the day her ex-husband, Peter Picurro, was arrested for soliciting sex from a detective posing as a 14-year-old girl in an Internet chatroom. Wyman-Picurro and her ex-husband co-owned Picurro's Pizzeria, a successful Tucson chain with six locations, which they founded in 1992.

Two days after the arrest, Picurro signed over his half of the business to Wyman-Picurro in an attempt to save the chain's reputation. But sales quickly fell by nearly half, as large customers, including the University of Arizona law school, canceled their accounts. Wyman-Picurro had to decide whether to try to salvage the company or walk away.

She decided to go for a turnaround, with the help of the chain's longtime marketing consultants, Ed Dunin-Wasowicz and Karen McGarrity. They put the chain through a complete identity makeover that began with changing the name to Fresco Pizzeria and Pastaria, and launched a $50,000 marketing and media campaign. Despite the fact that three of the franchisees bailed out, revenue crept back up at the three remaining stores. After pleading guilty to charges of sexual exploitation of a minor, Picurro received a two-and-a-half-year prison sentence in May 2007.

What the Experts Said

Jodi Aufdencamp, CEO and founder of Columbus, Ohio-based Mama Mimi's Take 'N Bake Pizza, thought the franchisee relationships could have been salvaged if Wyman-Picurro had asked for the franchisees' input "the minute the scandal broke." Marc Slutsky, chief operations officer and founder of Street Fighter Marketing in Gahanna, Ohio, said Wyman-Picurro had "guts" to try to salvage a damaged brand. Restaurant consultant Michael Rasmussen, of Rasmussen Tax Group in Conway, Arkansas, praised Wyman-Picurro for having saved enough for a $50,000 emergency marketing campaign.

What's Happened Since

"We have distance between Fresco and Picurro's," says Wyman-Picurro. "Everyone knows Peter is no longer part of the business." The University of Arizona and other large customers have returned. She expects to end 2008 with $2 million in sales.

What's Next

Wyman-Picurro expects to sell at least one more franchise by mid-2009. Her plan is to build a regional chain with 25 stores. And she says she has put her ex-husband's arrest behind her: "Life has gotten back to whatever normal is."