John Schnatter also reportedly used graphic descriptions of violence against minorities on a May conference call with a media agency.<\/b>
\nPapa John\u2019s International Inc.\u2019s outspoken chairman John Schnatter is facing another controversy that is battering the shares of the pizza chain he founded.
Just seven months after exiting the CEO role after making critical comments about the NFL\u2019s national-anthem dispute, Schnatter is under fire following a media report he allegedly used a racial slur and graphic descriptions of violence against minorities on a May conference call with a media agency.
Shares fell as nearly 6 percent Wednesday and finally settled at $48.33, down 4.8 percent.
A Papa John\u2019s spokesman declined to comment on the report but sent an emailed statement that said the company \u201ccondemns racism and any insensitive language, no matter the situation or setting.\u201d
A media agency working with Papa John\u2019s decided to cut ties after Schnatter\u2019s alleged behavior on the May call, according to Forbes. The agency, Laundry Service, didn\u2019t immediately respond to requests for comment.
Laundry Service, owned by sports agency owner Casey Wasserman, told staff in a May 31 letter that it would be ending its work with an unnamed client due to \u201cthe regrettable recent events that several employees of Laundry Service witnessed during interactions with a client\u2019s executive,\u201d according to a copy of the letter obtained by Bloomberg News.
The agency didn\u2019t name either the client or the executive in the letter.
Following the incident, Laundry Service said it held a call with the client\u2019s chief executive officer to discuss winding down the media agency\u2019s work with the company. \u201cWe also instructed the client that during this transition, the executive who made the offensive remarks must not communicate directly with any Laundry Service employee,\u201d according to the letter. \u201cWe are proud to share an understanding with you that racism, and other forms of discrimination, will not be tolerated.\u201d
Papa John\u2019s CEO Steve Ritchie sent an internal memo to team members, franchisees and operators on Wednesday addressing the event, though without mentioning Schnatter by name.
\u201cYou may have read the media reports today tied to our company culture. We want to make it clear to all of you that racism has no place at Papa John\u2019s,\u201d according to the memo obtained by Bloomberg News.
\u201cThe past six months we\u2019ve had to take a hard look in the mirror and acknowledge that we\u2019ve lost a bit of focus on the core values that this brand was built on and that delivered success for so many years,\u201d Ritchie said. \u201cWe\u2019ve got to own up and take the hit for our missteps and refocus on the constant pursuit of better that is the DNA of our brand.\u201d
Forbes reported that the incident took place on a call arranged between Papa John\u2019s executives and Laundry Service as a role-playing exercise for Schnatter to prevent future public-relations missteps.
Schnatter stepped down as Papa John\u2019s CEO in January. The decision followed a November controversy when he said that players\u2019 national-anthem protests were mishandled by NFL leadership and hurt the pizza chain\u2019s sales. Papa John\u2019s later apologized for the \u201cdivisive\u201d comments.<\/p>\n

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