How's that working out?
Not so well.
In an interview with Schnatter on WLKY TV in Louisville, Ky., on Friday, July 13, the founder, wearing a black shirt with the Papa John's logo, told interviewer Rick Van Hoose that a representative for PR agency Laundry Service demanded $6 million from the company in exchange for silence about a media training session with Schnatter in which he used the N-word.
Schnatter told Van Hoose that the demand for money came two weeks after the media training session. He said he declined to comply, and then the story appeared in Forbes on Wednesday, July 11.
Schnatter tendered his resignation as board chairman of Papa John's the same day. He owns nearly a third of the company. The stock plummeted on Wednesday on the news, then rebounded on Thursday. It closed down 4% to $51.41. on Monday.
Laundry Service did not respond to a request for comment from TheStreet.
During the TV interview, Schnatter apologized for using the derogatory term. "At the end of the day, I have to own it. I hurt people, I hurt the community, employees and franchises. I feel horrible about it."
On Sunday, July 15, the special committee of Papa John's board of directors ended Schnatter's founder agreement, which spelled out his role in the company including advertising and brand spokesman, and his sublease of his office at the company's Louisville headquarters, the company said in a press release.
"As previously announced, Mr. Schnatter is no longer a spokesperson for the company or the brand," according to the press release. "The company has 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."
Since Forbes published the piece, institutions to which Schantter has given generously have cut ties with him. The University of Kentucky has removed Schnatter's name from its research and teaching center and what was known as the John H. Schnatter Atrium, a community studying space central to the school's Gatton College of Business and Economics.
Schnatter resigned from the board of University of Louisville on Wednesday. Two days later, the university changed the Papa John's Cardinal Stadium to Cardinal Stadium.
Morehouse College, a historically black college in Atlanta, also cut ties with the company on Wednesday. It has had a Papa John's on its campus.
Also on Wednesday, the mayor of Schnatter's hometown of Jeffersonville, Ind., across the Ohio River from Louisville, Mike Moore ordered Schnatter's name, written as John H. Schnatter, removed from the town's fieldhouse. On Thursday, Moore told TheStreet that he mailed Schnatter a check for $400,000 that he had given the town for renovation of the gymnasium. Schnatter had committed to donate $800,000.
"I've known Mike Moore all my life," said Schnatter in the TV interview. "He overreacted."
About the removal of his name from the buildings, Schnatter added during the TV interview, "Everybody is just upset. They are cracking.