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Papa John Is Gone: Pizza Chain Founder Resigns After Racist Remark

Papa John Is Gone: Pizza Chain Founder Resigns After Racist Remark

The pizza chain is under scrutiny after founder John Schnatter admitted to and apologized for using the N-word in a May training session, an event that became public Wednesday.

Schnatter, 56, resigned hours after Forbes reported that he had used the racial slur during a call with executives from the marketing agency Laundry Service, which had aimed to train Papa John's officials on how to avoid public relations mishaps.

In November, he criticized the NFL over national anthem protests and blamed kneeling players for weakened pizza sales during a call with investors.

On the May call, Schnatter was asked how he would distance himself from racist groups online.

Schnatter also reportedly recounted his early life in IN, stating that African Americans were dragged behind trucks until they died.

Although Mr Schnatter's comments were apparently meant to illustrate his opposition to racism, several people on the call said they found his remarks offensive. He confirmed the incident and apologized in a statement to Forbes.

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"Papa John's condemns racism and any insensitive language, no matter the situation or setting", the statement said. Papa John's later apologized for Schnatter's comments.

J. David Grissom, the chairman of the board of trustees, said that he had spoken to Schnatter on Wednesday.

But Papa John's' sales have continued to decline - same-stores sales were down 5.3% in first-quarter 2018 - while Pizza Hut and Domino's have been on a roll.

Forbes reported Wednesday morning that Schnatter made the remark on a conference call arranged by Papa John's executives and a marketing agency as a role-playing exercise for Schnatter to avoid more public-relations problems, such as his remarks past year about NFL players protesting racism by kneeling during the national anthem.

Shares of Papa John's Pizza (PZZA) fell almost 6 percent after the report and were lately down 2.4 percent. The University has said it does not support racism, and also added Schnatter's remarks don't "reflect his personal beliefs or values".