Papa John’s founder says it was a ‘mistake’ to resign

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Papa John's is losing the pizza wars. Big time.

Papa John’s founder John Schnatter stated it was a “mistake” for him to resign.

In letter to the pizza chain’s board obtained by CNNMoney, Schnatter accused the board of not “doing any investigation” and stated its determination to take away him as chairman was primarily based on “rumor and innuendo.”

Final week, the Papa John’s founder resigned after he admitted to utilizing the N-word on a convention name with advertising and marketing company Laundry Service.

In his letter, he stated Laundry Service needed to rent rapper Kanye West to signify Papa John’s in promoting supplies, however Schnatter wasn’t on board with the concept as a result of West makes use of the N-word in his lyrics.

Schnatter claimed the company requested if he was racist, and he used the N-word in describing how KFC’s Colonel Sanders used to speak. Schnatter stated he would not ever use that phrase — though he simply had.

He additionally alleged that Laundry Service tried to extort Papa John’s by threatening to go public with Schnatter’s feedback. Laundry Service did not instantly return CNNMoney’s request for remark.

Schnatter has employed Patricia Glaser, an legal professional to signify him to the board. She despatched a separate letter saying any try and take away Schnatter from the board and not using a “correct vote of the shareholders can be null and void.” He nonetheless owns roughly 30% of the corporate’s shares.

Papa John’s (PZZA)has been distancing itself from the cofounder for the reason that scandal erupted final week. He was kicked out of his workplace and the model has scrapped Schnatter’s picture from its pizza packing containers and pulled adverts that featured him.

Learn the total letter under:

Pricey Fellow Board Member

I’m writing as a result of I consider it’s important that you just hear straight from me the info and circumstances surrounding the occasions that have been initially reported and mischaracterized within the July 11 Forbes story, “Papa John’s Founder Used the ‘N’ phrase on Convention Name” and in the end was carried in media throughout the nation.

On Could 14, Steve Richie, Mike Nettles, I and others within the firm met with executives and workers of The Laundry Service, who shared their inventive and technique, at their workplaces in New York. As you understand, we had been testing with vital success, my returning to the corporate’s promoting. On Could 22, at their sturdy suggestion, I participated in what The Laundry Service known as “variety media coaching.” The thought was to arrange me for questions I would get because of my reappearance at NHRA on Saturday, Could 26 in Chicago. (The Laundry Service, for these of you who do not know, is an promoting and advertising and marketing company which is a part of the Wasserman Media Group.) Throughout and after that assembly, The Laundry Service management strongly urged that our firm retain Kayne West as my co-spokesman within the tv spots and different promotions. I advised them that may not work as a result of he makes use of the “N” phrase in his lyrics.

Throughout this variety media coaching, which lined a large variety of subjects, I used to be requested whether or not I used to be racist. I, in fact stated no — which is a truthful assertion as these of you who know me nicely will attest and naturally, for those who felt in any other case you wouldn’t be sitting on the Papa John Board. I used to be requested if I used to be not racist, then why did I say what I did concerning the NFL state of affairs? I stated for those who take a look at what I stated, it was by no means racist. (The actual fact is, we utterly mishandled the NFL state of affairs from a public relations standpoint -both the Board of Administrators and firm management.) I then stated one thing on the order of, Colonel Sanders used the phrase “N,” (I truly used the phrase,) that I’d by no means use that phrase and Papa John’s would not use that phrase. Earlier, I gave an instance of a scarring expertise I examine in Texas after I was rising up which additional cemented my present abhorrence of racism. The considered this case to at the present time sickens me. Let me be very clear: I by no means used the “N” phrase in that assembly as a racial epithet, nor would I ever.

I’ve talked to a Papa John’s worker who was in that room with me who confirmed my recollection of those occasions.

The subsequent day, Could 23, the corporate made the choice — not me — to fireplace the Laundry Service, with their final day being July 2. We owed them roughly $1.three million. In fact, we stated we might pay them what was owed, however they stated they needed $6 million as a result of they claimed a few of their individuals had been offended by what I had stated. Furthermore, one among their attorneys stated they’d conduct a smear marketing campaign towards the corporate and me except we paid them what he was asking for. Sadly, the corporate gave in to this extortion try and supplied them $2.5 million or roughly $1.2 million greater than they have been owed.

On July 10, we obtained a name from the Forbes reporter who wrote the above-referenced story. The reporter gave me 15 minutes to offer him our feedback and stated he then was publishing the story. It printed the subsequent day. Please be assured, I’m going to get the info of this case out, however we wish to make certain we do it appropriately.

The Board requested me to step down as chairman with out apparently doing any investigation. I agreed, although at the moment I consider it was a mistake to take action. I’ve checked with company governance specialists who inform me that this was not a correct motion by the Board. On the final assembly, just a few of you raised the problem of whether or not I ought to step down as a director. As soon as once more, these people have been appearing on rumor and innuendo, with none investigation—not to mention a third-party investigation of the info. And as soon as once more, the company governance specialists with whom I consulted stated this isn’t the correct motion of both a director or the board.

I’m assured that an examination of the info will bear out what I’ve written on this letter and present that when once more our firm has demonstrated that it doesn’t know find out how to deal with a disaster primarily based on misinformation. I can’t enable both my good title or the nice title of the corporate I based and like to be unfairly tainted.

John

CNNMoney (New York) First printed July 18, 2018: 11:11 AM ET

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