Papa John’s founder says resigning ‘a mistake,’ criticizes his former company
The Associated Press
NEW YORK — Papa John’s founder John Schnatter says the pizza chain doesn’t know how to handle a “crisis based on misinformation” and that he made a “mistake” in agreeing to step down as chairman.
Mr. Schnatter says the board requested he step down without “any investigation” and he should not have complied, according to a letter his representative says was sent to the board Saturday. The letter’s contents were first reported by The Wall Street Journal.
Papa John’s, which has started scrubbing Mr. Schnatter’s image from its marketing materials and says it is evaluating all ties with its founder, did not respond to a request for comment Tuesday. The company said over the weekend it “specifically requested that Mr. Schnatter cease all media appearances, and not make any further statements to the media regarding the company, its business or employees.”
Mr. Schnatter, who remains on Papa John’s board, is also the company’s largest shareholder.
“I will not allow either my good name or the good name of the company I founded and love to be unfairly tainted,” Mr. Schnatter says in the letter.
A representative for Mr. Schnatter declined to comment on whether he was considering legal action.
In a report last week, Forbes said Mr. Schnatter used the N-word during a media training session in May, and that the incident led the marketing agency to sever its ties with the company. Mr. Schnatter says he used the word while describing how Colonel Sanders spoke, but that he would never use it as an epithet.
“Regardless of the context, I apologize. Simply stated, racism has no place in our society,” he said, according to a statement emailed last Wednesday.
Mr. Schnatter recounted in the Saturday letter that he was asked during the media training with a marketing agency whether he is racist. He responded “no.”
“I then said something on the order of, Colonel Sanders used the word ‘N,’ (I actually used the word), that I would never use that word, and Papa John’s doesn’t use that word,” he wrote, according to the Journal.
Mr. Schnatter also said in the letter that the ad agency Laundry Service wanted Papa John’s to use Kanye West as a co-spokesman, but “I told them that would not work because he uses the Nword in his lyrics,” according to CNBC.
He also said in the letter to the board that the agency asked for a higher payment than had been agreed to. Laundry Service did not respond to requests for comment.
Mr. Schnatter, who founded the pizza giant in 1984, had already resigned as CEO last year after blaming disappointing sales on the NFL leadership’s related to the controversy surrounding football players kneeling during the national anthem.
In the letter Saturday, Mr. Schnatter said that incident was also mishandled by the company’s leadership “from a public relations standpoint” and that what he said was not racist.
Papa John’s said Friday that Mr. Schnatter will no longer be featured in any of the company’s advertising or marketing materials. The New York Yankees said the same day that it was suspending its relationship with the firm. The University of Louisville announced that the school will change the name of its football stadium from Papa John’s Cardinal Stadium to Cardinal Stadium.
Papa John’s board can’t just remove him, according to people familiar with the matter. Shareholders would have to take that step at the next annual meeting, which is typically held in May. Mr. Schnatter, meanwhile, still owns almost 30 percent of the company, which could complicate a potential vote on his ouster.
Mr. Schnatter is tied to the company in other ways, too. His wife, Annette Schnatter, is a Papa John’s franchisee with one restaurant in Louisville, Ky., according to the company’s latest proxy statement. Last year, royalties earned by the company from her restaurant were about $76,000. Mr. Schnatter’s airline, Hampton Airways, provides business travel to the company as well.
The pizza chain has struggled recently with a nearly 5 percent decline in total revenue in the first quarter, according to the Journal, but the stock went up more than 12 percent after Mr. Schnatter’s resignation.