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Better Chairman. Better Company. Papa John's: Founder Resigns Over Racial Slur

12 July 2018

John Schnatter, the founder and chairman of USA pizza chain Papa John's, is facing the heat after reportedly using the n-word during a company conference call in May. The pizza magnate blamed a slump in sales previous year to a series of protests by NFL players who knelt on the field during the national anthem. The call was meant to facilitate public relations strategies to avoid coming off as a racist, which Schnatter desperately needed after his criticism of kneeling National Football League players got him uplifted by white supremacists and booted as the company's CEO.

The news comes the same day Schnatter faced intense backlash for using the racial slur while taking part in an exercise on handling public relations.

After Forbes' story ran, Schnatter, through Papa John's, issued a statement confirming he used the slur.

The company is not commenting on the alleged incident but did release the following statement to CNBC: "Papa John's condemns racism and any insensitive language, no matter the situation or setting".

Mr Schnatter also resigned from the University of Louisville board of trustees on Wednesday following the incident. "We've got to own up and take the hit for our missteps and refocus on the constant pursuit of better that is the DNA of our brand".

The city of Jeffersonville, Ind., had plenty of reason to add John Schnatter's name last year to its 80-year-old gymnasium.

On the call in May, Schnatter sought to downplay the significance of his criticism of the league and its players, Forbes reported.

That may not seem like a huge deal to you or us, but to Schnatter, that's everything - the pizza company is headquartered in Louisville, and Papa John is a MAJOR donor to their athletic programs.

According to an article from Forbes, John Schnatter allegedly used the "N-word" while speaking with marketing agency Laundry Service.

"We've got a new creative agency with Laundry Service", Steve Ritchie, who took over as CEO when Schnatter stepped back in December, said on the company's February 25 earnings call.

Papa John's Founder, Chairman and CEO John Schnatter, left, at the NFL Media Center, promoting Papa John's Super Bowl XLVII Coin Toss Experience, in January 2013.

The NAACP of Louisville and the Kentucky Democratic Party had called on Schnatter to resign before UofL made the news official.

Shares of Papa John's fell by as much as 5.9 percent to a new 12-month low of $47.80 a share in intraday trading Wednesday - erasing $96.2 million in market value.

Better Chairman. Better Company. Papa John's: Founder Resigns Over Racial Slur