Papa John's founder resigns as company chairman after slur revelation

NEW YORK - Papa John's founder John Schnatter has resigned as the company's chairman of the board, the company said late Wednesday.

A brief company statement said the board of directors accepted his resignation and that Olivia Kirtley acts as the company's lead independent director.

"Papa John's will appoint a new Chairman of the Board in coming weeks," the company said.

The news came after Schnatter apologized for reportedly using a racial slur during a conference call in May.

The apology Wednesday came after Forbes cited an anonymous source saying the pizza chain's marketing firm broke ties with the company afterward.

Forbes said Schnatter used the N-word during a media training exercise. When asked how he would distance himself from racist groups, Schnatter reportedly complained that Colonel Sanders never faced a backlash for using the word.

In a statement released by Louisville, Kentucky-based Papa John's, Schnatter said reports attributing use of "inappropriate and hurtful" language to him were true.

"Regardless of the context, I apologize," the statement says.

The University of Louisville also said Wednesday that Schnatter resigned from its board of trustees, effective immediately.

Schnatter stepped down as CEO last year after blaming slowing sales growth on the outcry surrounding football players kneeling during the national anthem. He started the company when he turned a broom closet at his father's bar into a pizza spot.

Papa John's shares fell nearly 5 percent Wednesday after the report of the slur, closing at $48.33.