Papa John’s founder resigns as chairman over his use of a racial slur.
Former CEO admits using racial slur in a conference call
NEW YORK — Papa John's says founder John Schnatter has resigned as chairman of the board.
The company made the announcement late Wednesday, hours after Schnatter apologized for using a racial slur during a conference call in May.
The apology comes after Forbes cited an anonymous source saying the pizza chain's marketing firm broke ties with the company afterward.
Forbes said Schnatter used the N-word during a media training exercise. When asked how he would distance himself from racist groups, Schnatter reportedly complained that Colonel Sanders never faced a backlash for using the word.
Schnatter admitted to using an offensive racial term during the call and apologized, according to an earlier company statement.
“News reports attributing the use of inappropriate and hurtful language to me during a media training session regarding race are true,” Schnatter said in the statement. “Regardless of the context, I apologize. Simply stated, racism has no place in our society.”
Schnatter apologized last November for “divisive” remarks when he criticized the NFL for its handling of players’ national anthem protests, saying it hurt the pizza chain’s sales. Schnatter stepped down as Papa John’s CEO in January.
The agency that decided to cut ties after Schnatter’s behavior on the May call, Laundry Service, didn’t respond to requests for comment.
Laundry Service, owned by sports agency owner Casey Wasserman, told staff in a May 31 letter that it would be ending its work with an unnamed client due to “the regrettable recent events that several employees of Laundry Service witnessed during interactions with a client’s executive,” according to a copy of the letter obtained by Bloomberg News.
The agency didn’t name either the client or the executive in the letter.
Following the incident, Laundry Service said it held a call with the client’s chief executive officer to discuss winding down the media agency’s work with the company.
“We also instructed the client that during this transition, the executive who made the offensive remarks must not communicate directly with any Laundry Service employee,” according to the letter.
“We are proud to share an understanding with you that racism, and other forms of discrimination, will not be tolerated.”
Papa John’s CEO Steve Ritchie sent an internal memo to team members, franchisees and operators on Wednesday addressing the event, though without mentioning Schnatter by name.
“You may have read the media reports today tied to our company culture. We want to make it clear to all of you that racism has no place at Papa John’s,” according to the memo obtained by Bloomberg News.
“The past six months we’ve had to take a hard look in the mirror and acknowledge that we’ve lost a bit of focus on the core values that this brand was built on and that delivered success for so many years,” Ritchie said.
“We’ve got to own up and take the hit for our missteps and refocus on the constant pursuit of better that is the DNA of our brand.”
Forbes reported that the incident took place on a call arranged between Papa John’s executives and Laundry Service as a role-playing exercise for Schnatter to prevent future public relations missteps.