Papa John’s Tumbles After Report Of Founder’s Racist Remarks

Business

Shares of Papa John’s tumbled on Wednesday to $47.80, the lowest price since February 2016, after after outspoken chairman and founder John Schnatter came under fire following a report from Forbes that he used the N-word on a conference call in May designed by marketing agency Laundry Service as a role-playing exercise for Schnatter in an effort to prevent future public-relations snafus” after he waded into the debate over national anthem protests and made several inflammatory comments against the NFL.

Papa John chairman and founder John Schnatter

On the May call, Schnatter was asked how he would distance himself from racist groups online. He responded by downplaying the significance of his NFL statement. “Colonel Sanders called blacks n—–s,” Schnatter allegedly said, before complaining that Sanders never faced public backlash.

Schnatter also reflected on his early life in Indiana, where, he said, people used to drag African-Americans from trucks until they died. He apparently intended for the remarks to convey his antipathy to racism, but multiple individuals on the call found them to be offensive, the source said. After learning about the incident, Laundry Service owner Casey Wasserman moved to terminate the company’s contract with Papa John’s. -Forbes

Shares in the pizza chain have dropped 25% since news of the remarks was made public.

Papa John’s did not dispute Forbes’ report on Wednesday, however they noted that “Papa John’s condemns racism and any insensitive language, no matter the situation or setting. … We take great pride in the diversity of the Papa John’s family, though diversity and inclusion is an area we will continue to strive to do better.”

As Bloomberg adds, the company’s new CEO, Steve Ritchie, who replaced Schnatter in January, sent an internal memo to team members, franchisees and operators on Wednesday addressing the event, though without mentioning Schnatter by name.

“You 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’s,” according to the memo obtained by Bloomberg News.

“The past six months we’ve had to take a hard look in the mirror and acknowledge that we’ve lost a bit of focus on the core values that this brand was built on and that delivered success for so many years,” Ritchie said. “We’ve got to own up and take the hit for our missteps and refocus …read more

Source:: Zerohedge.com

      

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