New York, Jul 12 (IANS): American restaurant franchise Papa Johns founder John Schnatter has resigned as the company chairman after a fallout over his use of the n-word during a conference call.

The company released a statement late on Wednesday that said the directors have accepted Schnatter's resignation.

"Papa John's will appoint a new Chairman in a couple of weeks," the statement read.

It was reported earlier on Wednesday that Schnatter used the n-word on a conference call in May.

The call was specifically designed as a role-playing exercise to prevent future public-relations disasters.

"Colonel Sanders called blacks n--s," Schnatter has complained as Colonel Harland David Sanders, the American businessman best known for founding fast food chicken restaurant chain Kentucky Fried Chicken, "never faced public backlash".

The restaurateur had already stepped down as chief executive in January after he caused controversy by criticising the professional American football league NFL over their national anthem policy.