Papa John's Founder Resigns After Using Racial Slur, Gains $50 Million

Papa John’s pizza continues to flounder after it was reported that the company’s Founder and Chairman John Schnatter had used the N-word in a conference call aimed at preparing Schnatter to take on a more public view. According to Forbes, the company was planning to re-introduce Schnatter as a large part of the Papa John’s marketing campaign after he had stepped back because of his controversial NFL comments. Schnatter stepped down as CEO late last year in response to backlash caused by his remarks blaming the NFL protests for a slow in Papa Johns’ business.

According to original reporting by Forbes:

'On the May call, Schnatter was asked how he would distance himself from racist groups online. He responded by downplaying the significance of his NFL statement. “Colonel Sanders called blacks n-----s,” Schnatter said, before complaining that Sanders never faced public backlash.

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.'

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Schnatter confirmed and apologized for his comments, which resulted in a 5 percent drop in the Papa John's stock. He then announced his resignation Wednesday evening, immediately sparking a spike in the stock. Shares were up as much as 13 percent at one point Thursday morning.

Schnatter owns about 30% of Papa John’s stock meaning the spike added $50 million to Schnatter’s net worth.

“Regardless of the context, I apologize,” Schnatter said in the statement to Forbes. “Simply stated, racism has no place in our society.”

Now the company is working to separate the brand from its founder, though exact details on how and when have not been decided.

According to The Washington Post, The MLB has quickly put an indefinite hold on a promotion they had partnered on with Papa John’s. The promotion had allowed fans to get a 40 percent discount on pizzas the day after players hit grand slams. Following the lead of MLB, at least six MLB teams have totally cut ties with the pizza chain. The latest, the Washington Nationals, said in a statement that they “do not condone discrimination of any kind.”

Even before Schnatter’s NFL comments, the founder had been swathed in controversy after saying the cost of insuring his employees under the Affordable Care Act would raise the cost of pizza in 2012.

Read more at Forbes.