Papa John's John Schnatter denies being racist

Papa John's founder John Schnatter is pushing back against suggestions he is a racist, claiming that media reports have mischaracterized his use of a slur against black people.

In a July 14 letter to members of the pizza chain's board, Schnatter denied using the "N-word" in a deliberately derogatory way during a May 22 diversity training session held with the Laundry Service, an marketing firm used by Papa John's.

"During this diversity media training, which covered a wide number of topics, I was asked whether I was racist," Schnatter said in the letter. "I, of course said no -- which is a truthful statement as those of you who know me well will attest and of course, if you felt otherwise you would not be sitting on the Papa John board.

"Let me be very clear: I never used the 'N'-word in that meeting as a racial epithet, nor would I ever," he added.

Schnatter also said he rejected the Laundry Service's proposal that Papa John's hire Kanye West to do advertising because of the music star's use of the "N"-word in his lyrics.

Schnatter stepped down as chairman of the restaurant chain last week after offering a public apology for his use of the slur. In his letter, he now says it was a "mistake" to relinquish his role at the company, and has hired an attorney to clear "his good name."

The board asked for his resignation "without apparently doing any investigation. I agreed, though today I believe it was a mistake to do so," Schnatter wrote. "I will not allow either my good name or the good name of the company I founded and love to be unfairly tainted."

Schnatter, who started the company in 1984, has sparked controversy before. He stepped down as CEO in December after criticizing National Football League players for kneeling during the national anthem, blaming the outcry surrounding their protests for slowing sales growth at Papa John's, at the time an NFL sponsor and advertiser.

Still a member of the board, Schnatter, according to regulatory filings, as of March held 29 percent of Papa John's shares, currently worth about $500 million.

Schnatter has hired Los Angeles trial attorney Patricia Glaser, who sent another letter to the board asking it to create a special committee to review the facts. 

A representative for Schnatter declined to comment on whether he was considering legal action. But in her letter Glaser suggested that individual board members could be held responsible if they fail to conduct an independent investigation into the incident that led to Schnatter's ouster as chairman.

Papa John's, which has started scrubbing Schnatter's image from its marketing materials and says it is evaluating all ties with Schnatter, did not respond to a request for comment. The company said over the weekend it "specifically requested that Mr. Schnatter cease all media appearances, and not make any further statements to the media regarding the company, its business or employees." 

In the report last week, Forbes said Schnatter used the N-word during a media training session in May, and that the incident led the Laundry Service marketing firm to sever its ties with Papa John's. Schnatter said in the letter to the board that the agency asked for a higher payment than had been agreed to. The marketing firm did not respond to requests for comment.

In the letter Saturday, Schnatter said that incident was also mishandled by the company's leadership "from a public relations standpoint" and that what he said was not racist.

The Associated Press contributed to this report.