Papa John’s founder resigns as chairman after using a racial slur on a call

Papa John’s founder John Schnatter.

He was undergoing an exercise on how to handle controversial situations when he made the comment.

Papa John’s founder John Schnatter resigned as board chairman from the pizza company after he apologized for using a racial slur on a conference call that was set up to teach Schnatter how to not say offensive things.

This is the latest in the fallout for Schantter, who faced increasing pressure after he admitted using the n-word and described a scene of violence against African Americans on a conference call in May.

Forbes first reported the call, which was set up to help take Schnatter through a “role-playing exercise” to help him deal with racially sensitive situations. Schantter stepped down as CEO from Papa John’s last year, after he blamed NFL leadership for failing to stop anthem protests, which he said had driven down the chain’s sales.

According to Forbes:

On the May call, Schnatter was asked how he would distance himself from racist groups online. He responded by downplaying the significance of his NFL statement. “Colonel Sanders called blacks n—–s,” Schnatter said, before complaining that Sanders never faced public backlash.

Schnatter also reflected on his early life in Indiana, where, he said, people used to drag African-Americans from trucks until they died. He apparently intended for the remarks to convey his antipathy to racism, but multiple individuals on the call found them to be offensive, a source familiar with the matter said.

Schnatter confirmed to Forbes that he made those comments and apologized. “News reports attributing the use of inappropriate and hurtful language to me during a media training session regarding race are true,” he said in a statement. “Regardless of the context, I apologize. Simply stated, racism has no place in our society.”

Papa John’s said it had accepted Schnatter’s resignation and will appoint a new chair. Schnatter — under mounting pressure, including from the Louisville chapter of the NAACP — also tendered his resignation Wednesday from the University of Louisville Board of Trustees.

Schnatter was appointed to the Board of Trustees by Gov. Matt Bevin but has long been a fixture at, and financial backer of, the university. The football stadium bears the name of the company he founded — Papa John’s Cardinal Stadium — and he donated millions to found an eponymous Center for Free Enterprise at Louisville.

Another city also responded: The mayor of Jeffersonville, Indiana — Schnatter’s hometown — ordered his name removed from its local field house on Wednesday. Schnatter had donated hundreds of thousands of dollars to renovate the aging facility last year.

The pizza chain itself was also dealt a blow after Yahoo reported that the MLB had suspended a promotional deal with Papa John’s. The NFL incident had brought repercussions on the company; the NFL replaced Papa John’s with Pizza Hut as the official pizza of the league, and Papa John’s faced slowing sales.

Schnatter created controversy even before his NFL remarks last year. The Papa John’s founder got slammed in 2012 for saying that the cost of insuring his employees under the Affordable Care Act would raise the cost of pizza, which led to pushback from customers.

Schnatter, who notoriously featured himself in lots of commercials, had dialed back his public-facing role with the company after the NFL debacle. But according to Forbes, the founder wanted to stage a comeback. The conference call was an attempt to avoid future PR disasters — and ended up seriously backfiring.