Mr Schnatter quit as chief executive past year after criticising the NFL over players' national anthem protests.
While on a call with a marketing agency, John defended his comments about the National Football League, saying KFC didn't face backlash when "Colonel Sanders called blacks n--s", Forbes reported.
The pizza chain later said it had accepted Mr Schnatter's resignation and that a new chairman would be appointed in the coming weeks.
Every time the Orioles scored five runs or more in a game this season, customers received a 50 percent discount the following day on regularly-priced Papa John's menu items ordered online by using a promo code.
Schnatter then resigned as chairman of the company and from his seat on the University of Louisville's governing board. He appears on its pizza boxes, in some of its TV ads and in the store's interiors.
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The deals last through 2040 and include no "morals" clauses that would allow the university to change the stadium's over Schnatter's objection in light of his comments and negative publicity. "But at the moment, you have to be very decisive and show you take this very seriously", Hollingsworth said. Schnatter subsequently issued a statement acknowledging the use of "inappropriate and hurtful" language.
Schnatter later apologized for the remark, which was made during a media training exercise after he was asked how he would distance himself from racist groups.
The University of Louisville has renamed Papa John's Cardinal Stadium "Cardinal Stadium", the latest in the fallout since Papa John's International Founder John Schnatter admitted on Wednesday that he used a racial slur in a business conference call in May.
Papa John's is the world's third-largest pizza chain, with more than 350 outlets in the United Kingdom and 4,900 restaurants worldwide. Schnatter released a statement Wednesday apologizing, which said in part, "Regardless of the context, I apologize". The company can not afford to alienate customers, with sales already under pressure from rivals such as Domino's. The Associated Press first reported the news and a Papa John's spokesperson confirmed it to CNNMoney.