Papa John's controversial CEO steps down after facing backlash for his criticism of NFL anthem protests

12/22/2017

Papa John's founder John Schnatter announced plans to step down on Thursday.
The news comes a month after Schnatter sparked controversy by slamming NFL leadership for its handling of players' protests during the national anthem.
The founder has inspired controversy and support in the past by speaking out against Obamacare and donating $1,000 to Trump's presidential campaign.

Papa John's controversial CEO and founder is stepping down.

On Thursday, Papa John's announced that founder John Schnatter would step down as CEO. Schnatter will be replaced by the company's current president Steve Ritchie.

Schnatter sparked controversy in November when he slammed NFL leadership over the ongoing national anthem protests.

"Leadership starts at the top, and this is an example of poor leadership,"CEO John Schnatter said in a call with investors.

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John Schnatter, Papa John's pizza founder

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NEW YORK, NY - JANUARY 31: John H. Schnatter, Founder, Chairman & CEO of Papa John's International, Inc. rings the NASDAQ Opening Bell at NASDAQ MarketSite on January 31, 2014 in New York City. (Photo by Rob Kim/Getty Images)

INDIANAPOLIS, IN - MAY 24: Papa John's founder and CEO John Schnatter attends the Indy 500 on May 23, 2015 in Indianapolis, Indiana. (Photo by Michael Hickey/Getty Images)

PARK CITY, UT - DECEMBER 06: John Schnatter attends the Deer Valley Celebrity Skifest held at the Silver Lake Lodge in Deer Valley on December 6, 2014 in Park City, Utah (Photo by Mark Davis/Getty Images)

PARK CITY, UT - DECEMBER 05: (L-R) Actress Eloise Broady, John Schnatter and John Paul DeJoria attend the Deer Valley Celebrity Skifest held at the Empire Lodge on December 5, 2014 in Park City, Utah (Photo by Mark Davis/Getty Images)

NEW YORK - OCTOBER 29: Founder of Papa John's John Schnatter speaks onstage at the Spider-Man and Papa John's Pizza's announcement of 'Hometown Super-Heroes' in Times Square October 29, 2007 in New York City. (Photo by Bryan Bedder/Getty Images)

LOUISVILLE, KY - MAY 06: Paps John's CEO John Schnatter attends the 132nd Kentucky Derby at Churchill Downs on May 6, 2006 in Louisville, Kentucky. (Photo by Paul Hawthorne/Getty Images)

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The CEO's statements quickly inspired backlash on the left and support on the right. The white supremacist website The Daily Stormer even posted an article asking whether Papa John's was the "official pizza of the alt right," forcing the company to say it does not want "hate groups" buying the chain's pizza.

Schnatter owns roughly 25% of Papa John's, and will stay on as chairman after stepping down as CEO in January. According to a press release from the company, he will "pursue his personal passion for entrepreneurship, leadership development and education."

This is not the first time that Schnatter has stepped down as CEO. The founder previously stepped down in 2005, after a period of declining sales at the company. Schnatter returned as CEO three years later. Prior to backlash for his comments on the NFL, Schnatter has a history of statements that have sparked political controversy.

Schnatter came under fire in 2012 for saying that the Affordable Care Act could be "lose-lose" for Papa John's franchisees and employees. Schnatter argued that Obamacare would cost Papa John's $5 million-$8 million annually and ultimately drive up the price of pizza.

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NFL players, owners protest after criticism from Trump

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Sep 24, 2017; Indianapolis, IN, USA; Indianapolis Colts players kneel during the playing of the National Anthem before the game against the Cleveland Browns at Lucas Oil Stadium. Mandatory Credit: Brian Spurlock-USA TODAY Sports

LONDON, ENGLAND - SEPTEMBER 24: Baltimore Ravens players kneel for the American National anthem during the NFL International Series match between Baltimore Ravens and Jacksonville Jaguars at Wembley Stadium on September 24, 2017 in London, England. (Photo by Alex Pantling/Getty Images)

GLENDALE, AZ - SEPTEMBER 25: Members of the Dallas Cowboys link arms and kneel during the National Anthem before the start of the NFL game against the Arizona Cardinals at the University of Phoenix Stadium on September 25, 2017 in Glendale, Arizona. (Photo by Christian Petersen/Getty Images)

NFL Football - Jacksonville Jaguars vs Baltimore Ravens - NFL International Series - Wembley Stadium, London, Britain - September 24, 2017 Jacksonville Jaguars owner Shahid Khan links arms with players during the national anthems before the match Action Images via Reuters/Paul Childs

LONDON, ENGLAND - SEPTEMBER 24: (L-R) Wide recceivers Chris Moore and Breshad Perriman of the Baltimore Ravens pray prior to kickoff during the NFL match between The Jacksonville Jaguars and The Baltimore Ravens at Wembley Stadium on September 24, 2017 in London, United Kingdom. (Photo by Mitchell Gunn/Getty Images)

LONDON, ENGLAND - SEPTEMBER 24: Jacksonville Jaguar players show their protest during the National Anthem during the NFL International Series match between Baltimore Ravens and Jacksonville Jaguars at Wembley Stadium on September 24, 2017 in London, England. (Photo by Matthew Lewis/Getty Images)

NFL Football - Jacksonville Jaguars vs Baltimore Ravens - NFL International Series - Wembley Stadium, London, Britain - September 24, 2017 Patrick Omameh of the Jacksonville Jaguars kneels during the U.S. national anthem before the match Action Images via Reuters/Andrew Boyers

NFL Football - Jacksonville Jaguars vs Baltimore Ravens - NFL International Series - Wembley Stadium, London, Britain - September 24, 2017 Jacksonville Jaguars players kneel during the U.S. national anthem before the match Action Images via Reuters/Paul Childs

LONDON, ENGLAND - SEPTEMBER 24: (Editors Note: This image has been turned black and white) Jacksonville Jaguars enter te stadium during the NFL International Series match between Baltimore Ravens and Jacksonville Jaguars at Wembley Stadium on September 24, 2017 in London, England. (Photo by Matthew Lewis/Getty Images)

Sep 24, 2017; Orchard Park, NY, USA; Buffalo Bills players kneel in protest during the National Anthem before a game against the Denver Broncos at New Era Field. Mandatory Credit: Timothy T. Ludwig-USA TODAY Sports

Sep 24, 2017; Orchard Park, NY, USA; Denver Bronco players kneel in protest during the National Anthem before a game against the Buffalo Bills at New Era Field. Mandatory Credit: Timothy T. Ludwig-USA TODAY Sports

Sep 25, 2017; Glendale, AZ, USA; Dallas Cowboys running back Ezekiel Elliott (21) and teammates stand next to service members holding a giant US flag during the national anthem prior to the game against the Arizona Cardinals at University of Phoenix Stadium. Mandatory Credit: Matt Kartozian-USA TODAY Sports

Sep 24, 2017; Indianapolis, IN, USA; The Cleveland Browns team stand and kneel during the National Anthem before the start of their game against the Indianapolis Colts at Lucas Oil Stadium. Mandatory Credit: Thomas J. Russo-USA TODAY Sports

Sep 24, 2017; Minneapolis, MN, USA; Members of the Tampa Bay Buccaneers link arms during the national anthem prior to the game against the Minnesota Vikings at U.S. Bank Stadium. Mandatory Credit: Brace Hemmelgarn-USA TODAY Sports

Sep 24, 2017; Detroit, MI, USA; Detroit Lions linebacker Jalen Reeves-Maybin (44) middle linebacker Tahir Whitehead (59) running back Ameer Abdullah (21) outside linebacker Steve Longa (54) defensive end Jeremiah Ledbetter (98) defensive end Armonty Bryant (97) defensive tackle A'Shawn Robinson (91) and defensive end Cornelius Washington (90) kneel during the national anthem before the game against the Atlanta Falcons at Ford Field. Mandatory Credit: Raj Mehta-USA TODAY Sports

September 24, 2017; East Rutherford, NJ, USA; New York Jets players lock arms during the national anthem before the game against the Miami Dolphins at MetLife Stadium. Mandatory Credit: Kyle Terada-USA TODAY Sports

Sep 24, 2017; Orchard Park, NY, USA; Members of the Denver Broncos kneel during the playing of the national anthem prior to a game against the Buffalo Bills at New Era Field. Mandatory Credit: Mark Konezny-USA TODAY Sports

Sep 25, 2017; Glendale, AZ, USA; The Dallas Cowboys players, coaches and staff take a knee prior to the National Anthem before the game against the Arizona Cardinals at University of Phoenix Stadium. Mandatory Credit: Matt Kartozian-USA TODAY Sports

Sep 24, 2017; London, United Kingdom; Jacksonville Jaguars players kneel during the playing of the United Sates national anthem before a NFL International Series game against the Baltimore Ravens at Wembley Stadium. Mandatory Credit: Kirby Lee-USA TODAY Sports

Sep 24, 2017; Foxborough, MA, USA; Members of the New England Patriots take a knee during the national anthem before a game against the Houston Texans at Gillette Stadium. Mandatory Credit: Greg M. Cooper-USA TODAY Sports

Sep 24, 2017; East Rutherford, NJ, USA; Some of the Miami Dolphins take a knee during the anthem prior to the game against the New York Jets at MetLife Stadium. Mandatory Credit: Robert Deutsch-USA TODAY Sports

Sep 24, 2017; Foxborough, MA, USA; Members of the New England Patriots kneel for the national anthem before the start of the game against the Houston Texans at Gillette Stadium. Mandatory Credit: David Butler II-USA TODAY Sports

Sep 24, 2017; Landover, MD, USA; Oakland Raiders players sit on the bench during the national anthem prior to their game against the Washington Redskins at FedEx Field. Mandatory Credit: Geoff Burke-USA TODAY Sports

Sep 24, 2017; Landover, MD, USA; Washington Redskins owner Daniel Snyder stands with cornerback Josh Norman (24) and cornerback Bashaud Breeland (26) and safety D.J. Swearinger (36) during the playing of the national anthem before the game between the Washington Redskins and the Oakland Raiders at FedEx Field. Mandatory Credit: Brad Mills-USA TODAY Sports

Sep 24, 2017; Carson, CA, USA; Kansas City Chiefs defensive back Marcus Peters (22) protests next to running back Charcandrick West (35) and defensive tackle Roy Miller (98) during the National Anthem prior to the game against the Los Angeles Chargers at StubHub Center. Mandatory Credit: Kelvin Kuo-USA TODAY Sports

Sep 24, 2017; Green Bay, WI, USA; Green Bay Packers tight end Lance Kendricks (84) and tight end Martellus Bennett (80) sit on the bench during the national anthem prior to the game against the Cincinnati Bengals at Lambeau Field. Mandatory Credit: Jeff Hanisch-USA TODAY Sports

Sep 24, 2017; Nashville, TN, USA; Recording artist Meghan Linsey kneels after singing the national anthem before the game between the Tennessee Titans and the Seattle Seahawks at Nissan Stadium. Mandatory Credit: Jim Brown-USA TODAY Sports

CHICAGO, IL - SEPTEMBER 24: Members of the Chicago Bears stand arm-in-arm during the National Anthem before a game against the Pittsburgh Steelers at Soldier Field on September 24, 2017 in Chicago, Illinois. (Photo by Jonathan Daniel/Getty Images)

CARSON, CA - SEPTEMBER 24: Justin Houston #50 of the Kansas City Chiefs is seen taking a knee during the National Anthem before the game against the Los Angeles Chargers at the StubHub Center on September 24, 2017 in Carson, California. (Photo by Sean M. Haffey/Getty Images)

NFL Football - Jacksonville Jaguars vs Baltimore Ravens - NFL International Series - Wembley Stadium, London, Britain - September 24, 2017 General view during the national anthems before the match Action Images via Reuters/Andrew Boyers

At the start of the game protestors take a knee in support of the movement started by NFL player Colin Kaepernick, outside Lincoln Financial Field, in South Philadelphia, PA, on September 24, 2017. Similar protest are staged around the nation after US President Donald Trump named Kaepernick a Son of A Bitch at a recent rally. (Photo by Bastiaan Slabbers/NurPhoto via Getty Images)

GLENDALE, AZ - SEPTEMBER 25: Strong safety Tyvon Branch #27 of the Arizona Cardinals links arms with staff and players during the National Anthem before the start of the NFL game against the Dallas Cowboys at the University of Phoenix Stadium on September 25, 2017 in Glendale, Arizona. (Photo by Christian Petersen/Getty Images)

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The backlash was swift, with many promising to boycott Papa John's in response to Schnatter's comments. Papa John's shares slumped about 4.2% during the controversy, Forbes reported.

Schnatter has also spoken out extensively against over-regulation. In his 2017 book "Papa: The Story of Papa John's Pizza," Schnatter argued that regulations are steering the US away from the system of free enterprise he believes is crucial to the nation's success.

"America in 2016 is on the path to becoming what Germany was in 1867," Schnatter writes in "Papa."

Schnatter's great-grandfather immigrated to the US from Germany in 1867 as a young craftsman seeking work. The US was a land of opportunity where people were free to become successful without fear of attack or government interference.

Speaking with Business Insider in January, Schnatter emphasized that he believes that regulation in the US needs to be dialed back to help businesses thrive.

"You've got to have free markets with limited government, with the proper amount of regulation where you don't jam entrepreneurship," Schnatter said.

Schnatter has moved away from public political discussions following the Obamacare controversy. The CEO donated $1,000 to President Trump's campaign but did not make any effort to publicly support the politician.

"As far as the politics, I have no idea," Schnatter told Business Insider prior to Trump's inauguration. "I do think we ought to give the new administration at least a chance to either do better things or to botch it."

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