Washington, Jul 12 (IANS): John Schnatter, the founder of American pizza chain Papa John's, has resigned as the company's chairman after it emerged that he used a racial slur during a conference call in May, a media report said.

Papa John's said in a statement late Wednesday that it would appoint a new chairman "in the coming weeks", reports CNN.

Schnatter had apologised earlier on Wednesday after Forbes reported that he used the racial slur while participating in a role-playing exercise designed to prevent public relations crises.

In a statement issued through the company, Schnatter said: "News reports attributing the use of inappropriate and hurtful language to me during a media training session regarding race are true. Regardless of the context, I apologise. Simply stated, racism has no place in our society."

Schnatter founded Papa John's in 1984. He is the public face of the company and its largest shareholder, controlling 29 per cent.

According to the Forbes report, Schnatter was on a call with Laundry Service, a marketing agency, and was asked how he planned to manage future public relations flare-ups.

Forbes also reported that Schnatter recalled growing up in Indiana, where he said people used to drag black people from their trucks until they died.

Forbes said Schnatter's comments were intended to demonstrate his stance against racism, but that people on the call were offended by them, reports CNN.

Schnatter also resigned Wednesday from the University of Louisville board of trustees.

Papa John's is the third largest pizza chain in the US by sales, trailing Domino's and Pizza Hut.