John Schnatter, founder and public face of pizza franchise Papa John’s, resigns from his position as chairman of the company’s board after Forbes reported Wednesday that Schnatter used the N-word in a conference call back in May.
The conference call was between Papa John’s executives and marketing agency Laundry Service, and the purpose of the call was to help Schnatter prevent public relations scandals. In a role-playing exercise, Schnatter was asked by the marketing agency how he would distance himself from racist groups on the internet.
Attempting to downplay comments he had made in November 2017, Schatter said, “Colonel Sanders called blacks n—–s,” complaining that Sanders hadn’t faced similar public backlash. He continued to describe how during his childhood in Indiana, people dragged Black people from the back of trucks until they died.
Though Schnatter ostensibly intended for his comments to demonstrate his opposition to racism, individuals who were on the call found them to be offensive.
Schatter confirmed the incident on Wednesday and apologized for his actions in an email statement.
“News reports attributing the use of inappropriate and hurtful language to me during a media training session regarding race are true,” he said. “Regardless of the context, I apologize. Simply stated, racism has no place in our society.”
Papa John’s stocks took a dive on Wednesday, falling as much as 5.9 percent, but rebounded following Schnatter’s resignation as chairman on Thursday.
Schnatter’s resignation follows his stepping down as CEO in January, after comments he made in November 2017 about the national anthem protests by NFL players, claiming that they were causing Papa John’s to lose advertising revenue from its deal as the “official pizza of the NFL.”
“You need to look at exactly how the ratings are going backwards. Last year the ratings for the NFL went backwards because of the elections. This year the ratings are going backwards because of the controversy,” Schnatter had argued.
Following the comments, Papa John’s stock fell 11 percent within hours, and had fallen 25 percent in total prior to Wednesday’s report, causing Schnatter’s net worth to fall by $70 million. The NFL and Papa John’s ended their sponsorship deal in February, in what they described as a mutual decision.