John Schnatter, the founder and former CEO of Papa John’s Pizza, reportedly uttered the ‘N-word’ during a conference call in May. Now, his fast food chain’s stock has taken a blow.


Schnatter, whose pizza food chain was an official sponsor of the NFL from 2010 to 2018, had previously asserted that NFL players who kneel during the national anthem negatively affect businesses. Papa John’s then-CEO publicly expressed his disapproval in NFL leadership for not resolving his perceived issue, and the two companies terminated their relationship in Feb. His company’s stock value dropped 12 percent, and Schnatter later issued an apology for his comments.

Papa John’s wants to avoid any further unneeded drama; Schnatter stepped down as the company’s CEO, and his prominence in promotional materials was minimized. He nevertheless was displeased by this reduced attention, hiring a company to create and air advertisements featuring him in certain regions and shoving Papa John’s CMO Brandon Rhoten out of his position in May.

In order to help polish Schnatter’s return to the public spotlight, he had a conference call with Laundry Service, a marketing agency. The call was a role-playing exercise, one with the goal of preventing any further brand-damaging comments. However, when Schnatter was asked how he would separate himself from volatile online groups, the Papa John’s figurehead underplayed his comments regarding the NFL, saying, “Colonel Sanders called blacks n——,” adding how Sanders never received public scrutiny.


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Moreover, Schnatter continued by describing how in his youth in Indiana, people hooked African-Americans on their trucks, dragging them along until they were killed. Schnatter’s tone-deaf comments were allegedly intended to convey his distaste for racism, but they were ultimately found to be offensive. Casey Wasserman, Laundry Service’s head, ended her company’s relationship with Papa John’s following this session.


In an email correspondence with Forbes, Schnatter confirmed the validity of this story, admitting, “News reports attributing the use of inappropriate and hurtful language to me during a media training session regarding race are true. Regardless of the context, I apologize. Simply stated, racism has no place in our society.”

Following this reveal, Papa John’s stock dropped to a 12-month low, losing 5.9 percent. Laundry Service also suffered this week, having to layoff ten percent of its workforce, which is accredited to it terminating its relationship with Papa John’s.

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