Papa John's founder apologizes for using N-word on conference call

In a statement issued through the company, Schnatter said: "News reports attributing the use of inappropriate and hurtful language to me during a media training session regarding race are true. Regardless of the context, I apologize. Simply stated, racism has no place in our society." 

According to the account in Forbes, Schnatter was on a call with Laundry Service, a marketing agency, and was asked how he planned to manage future public relations flare-ups. 

Schnatter caused controversy last year when he said that Papa John's pizza sales were hurt by the NFL's handling of players' kneeling during the National Anthem in protest of racial injustice. He stepped down as CEOtwo months after the comments. He remains chairman of the board. 

Related: Papa John's: We didn't mean to be 'divisive' on NFL protests

On the call, Schnatter sought to downplay the significance of his criticism of the league and its players, Forbes reported. 

"Colonel Sanders called blacks n-----s," he said, complaining that Sanders had never received backlash, according to Forbes. The parent company of KFC did not immediately answer a request for comment. 

Forbes also reported that Schnatter recalled growing up in Indiana, where he said people used to drag black people from their trucks until they died. 

Forbes reported that Schnatter's comments were intended to demonstrate his stance against racism, but that people on the call were offended by them. 

Laundry Service, which is owned by Wasserman Media Group, declined to comment through a spokesperson on Schnatter's remarks or the company's relationship with Papa John's. Forbes reported that Wasserman moved to end its contract with Papa John's after the call. 

Papa John's (PZZA) stock closed down 4.8%. 

Schnatter founded Papa John's in 1984. He is the public face of the company and its largest shareholder, controlling 29%, and appears in its ads, including one that rolled out as recently as April. 

Papa John's was the longtime exclusive pizza sponsor of the NFL, but ended its partnership with the league earlier this year under new CEO Steve Ritchie. The company is the third largest pizza chain in the United States by sales, trailing Domino's (DPZ) and Pizza Hut (PZZA).