Papa John’s Founder John Schnatter Calls Resignation A “Mistake,” Says N-Word Use Was “Mischaracterized”

Papa John’s Pizza founder and former CEO John Schnatter spoke up Wednesday for the first time since resigning as chairman last week amid a controversy, and now calls his resignation “a mistake.”

Schnatter also reportedly said reports on his use of a racial epithet earlier this year were “mischaracterized.” He wrote a letter to members of the pizza chain’s board complaining that he was forced to step down from his position despite no investigation being conducted into his recent behavior. Schnatter accused board members of firing him based solely on rumors.

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“The board asked me to step down as chairman without apparently doing any investigation. I agreed, though today I believe it was a mistake to do so,” Schnatter said in the letter. “I have checked with corporate governance experts who tell me that this was not a proper action by the board.”

“Colonel Sanders called blacks n—,” Schnatter reportedly said in a call with marketing agency Laundry Service, in reference to late Kentucky Fried Chicken founder Harland Sanders. Laundry Service was reportedly seeking Kanye West to represent Papa John’s in advertisements, but Schnatter voiced hesitance over the pitch due to West’s frequent use of the N-word and other explicit language in his music.

Schnatter — who often appeared in Papa John’s commercials — apologized for his remark and has now been removed from the company’s advertisements, and his face has also been taken off pizza boxes. The pizza chain also ended its long-standing sponsorship deal with the NFL earlier this year.

Here is the full letter Schnatter wrote to the company’s board:

“Dear Fellow Board Member

I am writing because I believe it is important that you hear directly from me the facts and circumstances surrounding the events that were initially reported and mischaracterized in the July 11 Forbes story, “Papa John’s Founder Used the ‘N’ word on Conference Call” and ultimately was carried in media across the country.

On May 14, Steve Richie, Mike Nettles, I and others in the company met with executives and staff of The Laundry Service, who shared their creative and strategy, at their offices in New York. As you know, we had been testing with significant success, my returning to the company’s advertising. On May 22, at their strong suggestion, I participated in what The Laundry Service called “diversity media training.” The idea was to prepare me for questions I might get as a result of my reappearance at NHRA on Saturday, May 26 in Chicago. (The Laundry Service, for those of you who don’t know, is an advertising and marketing agency which is part of the Wasserman Media Group.) During and after that meeting, The Laundry Service leadership strongly urged that our company retain Kayne West as my co-spokesman in the television spots and other promotions. I told them that would not work because he uses the “N” word in his lyrics.

During this diversity media training, which covered a wide number of topics, I was asked whether I was racist. I, of course said no — which is a truthful statement as those of you who know me well will attest and of course, if you felt otherwise you would not be sitting on the Papa John Board. I was asked if I was not racist, then why did I say what I did about the NFL situation? I said if you look at what I said, it was in no way racist. (The fact is, we completely mishandled the NFL situation from a public relations standpoint -both the Board of Directors and company leadership.) 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. Earlier, I gave an example of a scarring experience I read about in Texas when I was growing up which further cemented my existing abhorrence of racism. The thought of this situation to this day sickens me. Let me be very clear: I never used the “N” word in that meeting as a racial epithet, nor would I ever.

I have talked to a Papa John’s employee who was in that room with me who confirmed my recollection of these events.

The next day, May 23, the company made the decision — not me — to fire the Laundry Service, with their last day being July 2. We owed them approximately $1.3 million. Of course, we said we would pay them what was owed, but they said they wanted $6 million because they claimed some of their people had been offended by what I had said. Moreover, one of their attorneys said they would conduct a smear campaign against the company and me unless we paid them what he was asking for. Unfortunately, the company gave in to this extortion attempt and offered them $2.5 million or roughly $1.2 million more than they were owed.

On July 10, we got a call from the Forbes reporter who wrote the above-referenced story. The reporter gave me 15 minutes to give him our comments and said he then was publishing the story. It published the next day. Please be assured, I am going to get the facts of this situation out, but we want to make sure we do it correctly.

The Board asked me to step down as chairman without apparently doing any investigation. I agreed, though today I believe it was a mistake to do so. I have checked with corporate governance experts who tell me that this was not a proper action by the Board. At the last meeting, a few of you raised the issue of whether I should step down as a director. Once again, those individuals were acting on rumor and innuendo, without any investigation—let alone a third-party investigation of the facts. And once again, the corporate governance experts with whom I consulted said this is not the proper action of either a director or the board.

I am confident that an examination of the facts will bear out what I have written in this letter and show that once again our company has demonstrated that it does not know how to handle a crisis based on misinformation. I will not allow either my good name or the good name of the company I founded and love to be unfairly tainted.

John”