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'Papa John’s is not an individual,' CEO says, as it plans an audit of its diversity policies

Two days after Papa John’s founder John Schnatter admitted to using a racially charged slur during a May conference call, the company’s CEO Steve Ritchie said racism and insensitive language will not be tolerated and the company will embark on an audit of its corporate policies.

a number of sports teams have distanced themselves from the brand.

Papa John’s accepted Schnatter’s resignation as chairman of the company’s board on Wednesday and decided to no longer use his image in any of its advertising or marketing materials. However, Schnatter, who owns a 24 percent stake in Papa John’s, remains on the company’s board.

“This decision is the first of several key steps to rebuild trust from the inside-out,” Ritchie said.

The company’s next steps will include retaining an independent expert to audit its existing processes and policies surrounding diversity and inclusion and sending its senior management to its restaurants to hold listening sessions with employees.

“I will personally be leading this effort because there is nothing more important for Papa John right now,” Ritchie said.
“We want to regain trust, though I know we need to earn it. We will demonstrate that a diverse and inclusive culture exists at Papa John through our deeds and actions.”

Papa John’s shares closed Friday at $53.55, recouping the losses it logged Wednesday, and then some. In the aftermath of the report, the stock hit a 52-week low of $47.80, but is now up about 4 percent for the week as a whole.

Watch: Jim Cramer on Papa John's founder John Schnatter's resignation