There are far more regrettable actions than resigning after the latest in a string of regrettable statements. / Bloomberg There are far more regrettable actions than resigning after the latest in a string of regrettable statements. / Bloomberg

Papa John’s Founder Regrets Resigning as Chairman

Papa John’s International Inc.’s founder John Schnatter regrets resigning as chairman after using a racial slur during a training session and believes the company’s board mishandled the situation by pushing him aside without an investigation, according to people familiar with his thinking.

The people, who asked not to be identified discussing private views, didn’t say what action Schnatter might take in response or whether he would ask to be restored to his post. Schnatter declined to comment. The Papa John’s board declined to comment, according to spokesman Peter Collins.

Even as Schnatter stewed over his resignation during the weekend, the rest of the six-member Papa John’s board was taking action to further distance the pizza chain from its outspoken founder for his use of a racial slur. On Sunday, a special committee of independent directors ordered the termination of a so-called founder’s agreement that designated Schnatter as the brand’s face and voice. Papa John’s has requested he cease media appearances on behalf of the firm and evicted him from the headquarters, according to a company statement.

Schnatter, 56, stepped down as chairman at the request of the board on July 11 after a Forbes report that he used a racial slur and graphic descriptions of violence against minorities in a conversation with the company’s former media agency, Laundry Service. That was just months after he exited the chief executive officer job over critical comments about the National Football League’s national-anthem controversy. The restaurant chain said last week that it plans to appoint a replacement chairman.

Schnatter admitted to using the slur but said he was taken out of context. “Regardless of the context, I apologize. Simply stated, racism has no place in our society,” he said, according to a statement emailed last Wednesday.

A spokeswoman for Wasserman, the talent-management agency that owns Laundry Service, declined to comment.

Papa John’s said Friday that 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.

Schnatter is still on the company’s board of directors and is its largest shareholder, and the 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. Schnatter, meanwhile, still owns almost 30 percent of the company, which could complicate a potential vote on his ouster.

Schnatter’s tied to the company in other ways, too. His wife, Annette Schnatter, is a Papa John’s franchisee with one restaurant in Louisville, Kentucky, according to the company’s latest proxy statement. Last year, royalties earned by the company from her restaurant were about $76,000. Schnatter’s airline, Hampton Airways Inc., provides business travel to the company as well.

–With assistance from Scott Soshnick.


©2018 Bloomberg L.P.


This article was written by Leslie Patton, Lily Katz and Craig Giammona from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].

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