Executive, HR - Fall Comes Quick For Papa John
The founder of the US pizza chain Papa John's has resigned as chairman of the company he built after it was revealed John Schnatter used the "N-word" during a conference call in May.
Kentucky-based Papa John's International made the announcement after a whirlwind of a day in which the company was threatened with the sort of bad publicity that might have been unsurvivable. The company will appoint a new chairman in "in the coming weeks".
Ironically, Schnatter used the most-vile insult to black people in a conversation about racial sensitivity with a public relations firm called "Laundry Service" that was hired to tamp down the bad publicity that surrounds the millionaire. Schnatter's contention was that fried chicken magnate Colonel Sanders "called blacks (the N-word)" and that he never faced criticism for it. Laundry Service severed its relationship with Papa John's.
When details of the conversation leaked out, reaction was swift and negative. The company's stock tumbled nearly five percent, and Papa John's market capitalization drops nearly US$84 Million on the day. The face of the company tried to deal with it himself.
"Regardless of the context, I apologize," Schnatter said in an apology earlier in the day. "Simply stated, racism has no place in our society."
That wasn't enough. The NAACP's Louisville branch calls on Schnatter to step down as a University of Louisville trustee, and by the end of the day he did so. Major League baseball cancelled a lucrative cross-promotion with the pizza company. The mayor of Schnatter's home town of Jefferson, Indiana ordered his name struck off of a community gym he helped pay to renovate. Schnatter's resignation came at the end of the business day.
But this wasn't the millionaire's first round with controversy. A few years back, he stepped on a live wire when he claimed he'd have to raise the price of pizza because of the passage of the US Affordable Care Act, known as Obamacare. The claim wasn't true and the price of his pizza didn't go up. He actively supported Republican Mitt Romney for President in 2012, and Donald Trump in 2016.
Earlier this year, Papa John's pizza sales were damaged by Schnatter's claim that people were ordering fewer pizzas because of NFL players kneeling during the National Anthem in protest of racial injustice. In fact, company execs admit was already facing pressure from food delivery outfits like Grubhub and Uber eats which compete with traditional pizza delivery. Two months after those comments, Schnatter reduced his role and stepped down as CEO, remaining as Chairman - now that's gone.