Racial Slur Leads to Papa John’s Founder Quitting Chairman Post

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Racial Slur Leads to Papa John’s Founder Quitting Chairman Post


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John Schnatter, the founder of Papa John’s Pizza, has resigned as chairman of the board of Papa John’s International, the company announced late Wednesday, hours after he apologized for using a racial slur in a comment about black people during a conference call in May.

The company, one of the largest pizza chains in the United States, with more than 5,000 locations around the world, said that its independent directors had accepted Mr. Schnatter’s resignation and would appoint a new chairman in the coming weeks. Mr. Schnatter will remain on Papa John’s board, according to a regulatory filing.

Earlier Wednesday, Mr. Schnatter described his comments during the conference call as “inappropriate and hurtful” in a statement provided by the company.

The apology was prompted by a report in Forbes that described the call, which was with the Laundry Service marketing agency. Mr. Schnatter said that Col. Harland Sanders, who founded the Kentucky Fried Chicken fast-food chain and was its longtime spokesman, used the racial slur to describe black people and never faced backlash for doing so, according to the Forbes report.

He also discussed his youth in Indiana and the violence against black people that took place there, according to the report.

“Regardless of the context, I apologize,” he said in his statement confirming the report. “Simply stated, racism has no place in our society.”

Mr. Schnatter, 56, also resigned from the board of trustees for the University of Louisville, according to the school.

Also, Major League Baseball decided on Wednesday to suspend its Papa Slam promotion, which provided discounts to Papa John’s customers each time a player hit a grand slam.

He declined through the company to comment further.

Mr. Schnatter set off an uproar in November by blaming the National Football League — with which Papa John’s had a sponsorship deal — for a slump in sales during a conference call with investors. He complained about the league’s handling of football players who protested racism and police brutality by kneeling during the national anthem.

“The N.F.L. has hurt us, and more importantly, by not resolving the current debacle to the player and owners’ satisfaction, N.F.L. leadership has hurt Papa John’s shareholders,” Mr. Schnatter said on the investor call, adding that the “ongoing situation” should have “been nipped in the bud.”

The comments were praised by white supremacists, and Papa John’s responded by saying it did not want white supremacists or their groups buying its pizzas. Mr. Schnatter, an outsized figure at the company who appeared frequently in its commercials and owns 30 percent of its stock, stepped down as chief executive in December.

In February, the company said that was giving up a nearly eight-year sponsorship deal with the N.F.L. A day later, the league announced that Pizza Hut, a longtime rival, was its new pizza sponsor.

Forbes reported that the call in May was intended to help Mr. Schnatter avoid future public relations blunders involving race.

Shares of Papa John’s fell nearly 5 percent on Wednesday, after the Forbes report, bringing the stock’s decline since November to about 30 percent. But in trading on Thursday, following news of Mr. Schnatter’s resignation, shares gained more than 10 percent.

Casey Wasserman, the chief executive of Wasserman, the talent management company that owns Laundry Service, declined to comment.

Mr. Schnatter started selling pizzas in 1984 out of the former broom closet of his father’s tavern in Indiana. The next year, he opened the first Papa John’s.

He stepped down as chief executive in 2005 after a prolonged sales decline and then returned to the role at the end of 2008.

Papa John’s is the fourth largest pizza chain in the world, behind Domino’s, Pizza Hut and Little Caesar’s, according to the market research company Euromonitor International.

In its most recent quarter, Papa John’s North American units suffered a 5.3 percent same-store sales decline while its international outlets saw a 0.3 percent increase. Systemwide sales for Pizza Hut in its latest quarter increased 1 percent in stores open at least a year.



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