Papa John's Chairman John Schnatter resigns after apologizing for racial slur

David Harten | Courier Journal

Show Caption Hide Caption John Schnatter in the hot seat for using the N-word Backlash was swift after reports that Papa John's founder John Schnatter used the N-word. He's resigned as the company's chairman as well as a trustee at the University of Louisville

LOUISVILLE, Ky. – After a day in which he admitted he used a racial slur, John Schnatter resigned from the company he built.

Papa John's International announced late Wednesday that Schnatter had resigned as chairman. The company will appoint a new chairman in "in the coming weeks."

The resignation ends a day which began with a story from Forbes in which Schnatter was said to have used the N-word on a call with a public relations firm that was designed to help the company avoid more public relations issues.

By 2 p.m., nine hours after the Forbes story was published online, Schnatter, the pizza baron and self-made billionaire, released a statement admitting he'd used the slur and apologizing.

"News reports attributing the use of inappropriate and hurtful language to me during a media training session regarding race are true," Schnatter said. "Regardless of the context, I apologize. Simply stated, racism has no place in our society."

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Schnatter then resigned from the University of Louisville board.

The mayor of Jeffersonville, Indiana, had Schnatter's name removed from a historic fieldhouse that he had donated $800,000 to restore. After the donation, the Nachand Fieldhouse had been renamed in Schnatter's honor in his hometown of Jeffersonville,

Schnatter's remark set of outrage all over social media and with several groups, including the NAACP calling for Schnatter to resign from the University of Louisville board prior to it happening.

Schnatter's meteoric rise, launched from the closet of his father's failing Jeffersonville bar in 1984, is integral to the Papa John's story. The business has grown to become a publicly traded international franchise with more than $1 billion in annual sales. Papa John's franchises over 4,700 stores, 3,500 in the U.S. and over 1,200 in nearly 40 other countries and territories.

Schnatter, who owns roughly $700 million in company stock, is seen on pizza boxes and, until the last few months, in many Papa John's TV spots where he's rubbed elbows with NFL stars like retired quarterback Peyton Manning.

The Forbes' story cited a source alleging that Schnatter was asked during a May conference call to role-play through scenarios to help him learn to respond to questions about racial issues. Asked how he would distance himself from racist groups online, Schnatter was quoted as saying that Colonel Harland Sanders had referred to blacks using the N-word, but the Kentucky Fried Chicken founder never faced a backlash. But instead of saying "N-word," Schnatter used the offensive word.

The report said Schnatter "also reflected on his early life in Indiana, where, he said, people used to drag African-Americans from trucks until they died." The reference apparently was meant to show that he found racism deplorable, but the Forbes source said that multiple people on the call were offended. The owner of Laundry Service, the marketing firm working with Schnatter, had terminated its contract with Papa John's after it learned about the comments.