Despite its best efforts to rehabilitate its brand, Papa John's is still paying for offensive remarks made by its founder. 
 
 John Schnatter admitted last month to using the N-word on a conference call. He apologized and resigned as Papa John's chairman soon after Forbes published a story about the incident. 
 
 On Tuesday, the company said its same-store sales in North America fell 10.5% in July and 6.1% in the most recent quarter. 
 
 "Results have been challenged by recent events," Steve Ritchie, president and CEO of Papa John's (PZZA), said in a statement. "Our entire leadership team understands the importance of getting our culture and business improvements right." 
 
 Shares fell more than 10% after hours. 
 
 On a call with analysts, Ritchie said that Papa John's stakeholders agreed with the company to take Schnatter out of the public eye. 
 
 Related: Papa John's to pizza-eaters: We're listening 
 
 "I have spent a significant amount of time in recent weeks in the field, talking with our franchisees, our customers, our drivers and employees," he said. "Franchisees and partners have expressed overwhelming support for ... our decision to remove John as brand spokesperson." 
 
 "We are not dependent, nor should we be, on one person," he said. 
 
 Days after the racial slur scandal broke, Papa John's announced that it would remove Schnatter's image from its marketing materials, where he featured prominently. A special committee of the board of directors will oversee an outside auditor's investigation into Papa John's culture, including the company's existing processes, policies and systems related to diversity and inclusion. 
 
 Ritchie said that Papa John's made the decision to distance itself from Schnatter after he said in November that the NFL protests hurt sales. 
 
 "The research and analysis we conducted after comments by our founder in November of 2017 have made it clear that we needed to move away from a founder-centric marketing plan," Ritchie said. "Obviously, the recent events have further evidenced that we need to move on." 
 
 Ritchie noted that comparable sales have slumped since November. Schnatter left the chief executive seat at his namesake company in December last year. 
 
 Related: Papa John sues Papa John's 
 
 But Schnatter, who said he regrets resigning from his post as chairman, isn't walking away without a fight. He remains on the board, and owns 29% of the company's stock. He has filed a lawsuit against the company, requesting to see company documents "because of the unexplained and heavy-handed way in which the company has treated him since the publication of a story that falsely accused him of using a racial slur." 
 
 Papa John's denied Schnatter's claims in a statement. The company said it was "saddened and disappointed" by the lawsuit, which it called "needless and wasteful." 
 
 Schnatter expressed concern over the health of the company in a statement published on Tuesday. 
 
 "History shows that the Company performs better with me involved, and it declines when I step away," he said. 
 
 — CNN's Jordan Valinsky and Jackie Wattles contributed to this report. ||||| John Schnatter, who founded the Papa John's pizza chain in the 1980s, is leaving the chief executive seat. 
 
 He'll stay on with the company as its chairman, the company said Thursday in a press release. Replacing him is Steve Ritchie, the current chief operating officer. The change will take effect on January 1, the company said. There was no reason given for the change in leadership. 
 
 The shakeup comes after a string of public relations debacles and slumping sales. 
 
 Papa John's is a major NFL sponsor, and Schnatter wasn't shy about sharing his thoughts about players who took a knee during the national anthem to protest the treatment of black Americans, particularly by police. 
 
 President Trump earlier this year publicly criticized players who chose to kneel, ratcheting up the controversy. 
 
 "This should have been nipped in the bud a year and a half ago," Schnatter said on a conference call with investors in November. "The controversy is polarizing the customer, polarizing the country." 
 
 During the call, he also blamed the controversy for dismal sales. 
 
 Related: Papa John's says it didn't mean to be 'divisive' on NFL protests 
 
 Backlash ensued on social media and his remarks were criticized by those who argue the players are exercising free speech and should be permitted to do so. Late-night comics lampooned Schnatter. 
 
 And, adding to the ordeal, the white supremacist website Daily Stormer floated the idea that Papa John's was the "official pizza of the alt-right." 
 
 That forced the Louisville, Kentucky-based Papa John's to issue a clarifying statement asserting, "We condemn racism in all forms," according to the Courier-Journal. 
 
 About two weeks after Schnatter made his controversial comments, the company attempted an apology on Twitter. 
 
 Related: Papa John's says NFL protests are hurting sales 
 
 "The statements made on our earnings call were describing the factors that impact our business and we sincerely apologize to anyone that thought they were divisive," the tweet read. "That definitely was not our intention." 
 
 The pizza chain said that it supports "the players' movement to create a new platform for change" but that it also believes that "as Americans, we should honor our anthem." 
 
 "We will work with the players and league to find a positive way forward. Open to ideas from all. Except neo-nazis," the company tweeted, offering a "middle finger" emoji to "those guys." 
 
 Papa John's has also faced waning sales recently. The company's stock price is down more than 30% so far this year. 
 
 Ritchie, Schnatter's replacement, joined Papa John's as a customer service rep in 1996 making $6 per hour. He went on to own a Papa John's franchise, and in 2014 he was promoted to chief operating officer. 
 
 --CNNMoney's Ahiza Garcia and Rob McLean contributed to this report.
– The Papa John of Papa John's is stepping down as CEO of the pizza chain effective Jan. 1, CNN reports. Papa John's founder John Schnatter will stay on as chairman, the company said Thursday. No reason for Schnatter's changing role was given, but the company said he will be pursuing "his personal passion for entrepreneurship, leadership development, and education," according to Bloomberg. Schnatter will be replaced by Papa John's chief operating officer Steve Ritchie, who started at the company in 1996 as a customer-service rep making $6 an hour. Business Insider reports Schnatter, who owns about 25% of Papa John's, previously left his position in 2005 amid declining sales only to come back three years later. Not only are Papa John's sales once again declining—stock is down more than 30% this year—but the pizza chain has found itself embroiled in controversy. In November, Schnatter blamed declining sales on football players protesting the treatment of black Americans during the national anthem and the NFL not doing more to stop them. That led to an apology from the company two weeks later, but not before white supremacist website the Daily Stormer mused about Papa John's being the "official pizza of the alt-right." In response, the chain had to clarify that it didn't want "hate groups" for customers.