Papa John's Founder Resigns, Leaving Behind Legacy Of PR Dumpster Fires [UPDATED]

THURSDAY, JULY 12 UPDATE: John Schnatter has stepped down as chair of the board at Papa John's. According to Huffington Post, "Papa John's will appoint a new chairman in the coming weeks. In the meantime, Olivia Kirtley will act as the company's lead independent director." We suspect those pizza boxes will get a redesign as well.

Forbes reported today that Papa John's founder John Schnatter used the N-word during a conference call with outside marketing firm Laundry Service. Ironically, the call was intended to help Schnatter avoid future public relations problems. CNBC reports that in the call, Schnatter "tried to downplay comments he made about the National Football League and allegedly said, 'Colonel Sanders called blacks n——-s,' and complained that the KFC founder never faced public backlash." Schnatter was likely referring to the NFL dropping Papa John's as a sponsor after he made critical comments about the league regarding the kneeling-during-the-national-anthem controversy.

Forbes described the call: "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."

The Forbes story had an immediate effect on Papa John's stock, as CNBC notes: "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 after the report."

Schnatter quickly followed up with an apologetic statement:

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

After the NFL controversy in November, Schnatter resigned as Papa John's CEO in December. (The NFL soon picked up Pizza Hut as a sponsor; Papa John's tried to rebound with drag racing.) Although no longer CEO of the company, as of now, Schnatter is still chairman and is featured on Papa John's pizza boxes.