LOUISVILLE, Ky. (WDRB) — John Schnatter's drinking became such an issue when he led Papa Johns that he seemed "impaired" during numerous phone calls and board meetings, the company's former CEO said in a sworn deposition. It got to the point, Steve Ritchie testified in 2022, that Schnatter was admitted to a treatment facility in Pennsylvania for alcohol abuse.
The deposition was part of Schnatter's six-year federal lawsuit against public relations firm Laundry Service over the infamous racial slur that led to his downfall at the pizza company he founded in southern Indiana.
Ritchie said he started to become concerned in 2017. He'd always known Schnatter to enjoy a drink from time to time. But Ritchie said Schnatter's tone and temperament changed that year. His drinking started to "impair some of his ability to do some of his regular work functions," Ritchie testified.
"It was a personal concern of mine to get him some help," he said.
Ritchie said that help came from Papa Johns board member — and Texas Roadhouse founder — Wayne Kent Taylor. Ritchie said Taylor, who died in 2021, came to him with a plan for an intervention, which Ritchie approved. In his sworn deposition, Ritchie said Taylor then took Schnatter to Caron Treatment Centers in Pennsylvania for in-patient rehab. Ritchie said Schnatter entered the facility to treat "alcohol abuse" but failed to complete the treatment.
"He was in a hospital for the majority of the time that he was in Pennsylvania," Ritchie testified. "... I believe he was at the rehab center for a couple of days. They moved him to the hospital and back to the rehab center for maybe a couple of days, and he left.
"He needed hospital attention, medical attention."
Schnatter denied he entered treatment and actually said he went to Pennsylvania to seek treatment for Taylor, who he said had a "drug problem."
Ritchie's testimony was corroborated by Katie Wollrich, Papa Johns' former vice president of marketing and advertising. She said in a 2021 deposition that she was told Schnatter was in a treatment center in December 2017 and that it was "alcohol-related." Given her position in the company, Wollrich said she was told this "in a precautionary way" so she could monitor social media if Schnatter's treatment was somehow leaked to the public.
"We were hoping that it would stay quiet and not become public news," Wollrich testified. "We didn't want additional reason for people to comment on John, especially his personal life."
Attorneys for Laundry Service declined to comment for this story, and Schnatter's attorneys haven't commented.
His drinking became a focal point of the lawsuit as the defense — Laundry Service and its parent company, Wasserman Media Group — aimed to paint Schnatter as a liability to Papa Johns before that racial slur was uttered on a conference call in May 2018. The defense said Schnatter was the "architect of his own demise" and "the only person who bears responsibility for what occurred."
That call, which forever changed the Louisville-based pizza giant's future and that of its founder, was just the tip of the iceberg in the drawn-out court case. In his own sworn deposition in 2023, Schnatter denied the alcohol abuse and said the racial slur was all a setup. He was baited into it, he testified, and he spent six years trying to prove it.
'Papa John's is not an individual'
In the fall of 2017, the NFL was about a year into a wave of player protests during the National Anthem, a pattern started by San Francisco 49ers quarterback Colin Kaepernick. The protests quickly became political and frequently drew the ire of President Donald Trump.
The NFL and Papa Johns had been partners for years. During an earnings call Nov. 1, Schnatter called it a "debacle" and blamed the controversy for the company's disappointing sales in the third quarter.
"This should have been nipped in the bud a year and a half ago," Schnatter said to start the call with Wall Street analysts. "... good or bad, leadership starts at the top, and this is an example of poor leadership."
At the time, it was reported Schnatter read those words from prepared remarks. But company leadership has since said Schnatter went rogue. It was customary, chief marketing officer Brandon Rhoten said in a 2021 deposition, for these calls to run off a script.
"It was not part of the script that I had," said Rhoten, who lasted less than a year with the company.
Papa Johns' sales dropped almost overnight. Within two weeks, Schnatter apologized. Within six weeks, he stepped down as CEO, though he remained chairman of the board.
"People assumed that he was essentially against the protests, or that Papa John's was against the protest," Rhoten testified. "... We saw sales begin to decline at a pretty steady rate within days of the call, if not immediately after."
Around the same time, Papa Johns hired Laundry Service to "modernize" its marketing, Rhoten said. By early 2018, company sales had dipped two straight quarters for the first time since 2003. In May, Laundry Service and Papa Johns held a conference call to prepare Schnatter for a round of national interviews aimed at resurrecting the company's public perception. Nearly an hour into it, Schnatter lamented the idea leaders of the past could say far worse things than he did and face fewer consequences.
"What bothers me is Colonel Sanders called blacks n******," Schnatter said. "I'm like, I've never used that word. And they get away with it. … Yet we use the word 'debacle' and we get framed in the same genre. It's crazy. The whole thing's crazy."
In 2021, Schnatter released a full tape and transcript of the call:
Two months after the call, a portion of it was leaked and published in a story by Forbes. Later that day, Schnatter resigned as chairman of Papa Johns' board and from his seat on the board of trustees at the University of Louisville. Four days later, Ritchie publicly apologized.
"Racism and insensitive language — no matter the context — will not be tolerated at any level of our company. Period," he said in an email to customers. "Papa John's is not an individual."
Later that week, Schnatter said he was asked to resign and it was a mistake to do so. He said Papa Johns never investigated what happened and failed to properly contextualize his comments.
In 2019, Schnatter sued Laundry Service. He sought a jury trial to clear his name and pledged to donate all proceeds from the case to charity. A week before he filed the lawsuit, Schnatter gave a preview of his legal strategy in an exclusive interview with WDRB News. He said Ritchie and the board at Papa Johns conspired to push him out.
"(They) all used the Black community and race as a way to steal the company. They stole the company and now they've destroyed the company," he said. "... I never dreamed that people that I cared about — that I loved, that I made multimillionaires — would do what they did. They fabricated it. Shame on them."
Six years after filing that lawsuit, Schnatter was close to getting that jury trial. Over and over, he sought the public stage to clear his name and show Laundry Service's "malicious" intent. He repeatedly fought the defense's efforts for private mediation.
But that fight changed, abruptly, earlier this month.
'He can't control it'
After Schnatter uttered the racial slur in May 2018, Laundry Service immediately moved to terminate its contract with Papa Johns.
In Ritchie's sworn testimony, he said Casey Wasserman — the CEO of Wasserman Media Group — told him they had to end the partnership after the call, and, if they didn't agree to terms, there'd be litigation.
"This is your founder's doing. He did this," Wasserman told Ritchie, according to the latter's testimony. "He's offended all my employees. We can't work on your account. We need to settle this and move on. If you guys don't want to settle this now, it's likely to be litigated, and it's going to be severely damaging to your founder if this became public in litigation."
Schnatter took that as a threat.
"Ritchie came to my office one evening and said we're getting threatened by Wassmeran that if we don't pay him $6 million, he's going to bury the founder," Schnatter testified in 2023. "... I said, 'Well, call the FBI.'"
This was the crux of Schnatter's legal argument. He said the threat proved there was a coordinated plan to remove him from Papa Johns and the call was a setup.
And furthermore, Schnatter said the recording of that 2018 call has employees discussing how they can use his slur against him. In the audio file Schnatter released in 2021, those comments are plainly heard. It's unclear exactly who said them, but Schnatter released a transcript of the call with names assigned to each line.
"I hope he gets f******' sent out to the pasture on this s***. I really, really f***** do," a man Schnatter identified as Jason Stein, Laundry Service's founder, said on the call. "He has no problem saying that but he can't say that he said anything wrong. He's a racist."
Several Laundry Service executives finished the call saying Schnatter would start "spiraling" if he sat for a lengthy interview like the call they just finished.
"(We) just have to make sure it's an hour-long conversation so that he says s*** like he said here," Stein said. "It's gonna come out. He can't control it."
'I think you need help'
Schnatter's sworn testimony covered a lot of ground but spent considerable time on Ritchie's claims of Schnatter's alcohol abuse and time in treatment. There was uncertainty in some answers, but Schnatter denied he entered treatment and actually said he went to Pennsylvania to seek drug treatment for Taylor, not the other way around. Schnatter testified Taylor told him Schnatter needed "help" and was "partying too much," but, according to the deposition, they went together for Taylor.
"I tried to take Kent out to Pennsylvania to get some help. I took him up in my jet," Schnatter testified in 2023. "... I said 'Hey, you know, I think you need help.' And he goes 'I think you need help.' And I said 'Good. I'll go with you.'"
Schnatter said he stayed somewhere in Pennsylvania that was "kind of like a hotel" while Taylor went into treatment. He downplayed Ritchie's testimony, saying he didn't "remember being drunk at work," though he said there was alcohol at "every board meeting."
"I don't recall going to any kind of rehab," he testified.
The defense filed motion after motion to obtain copies of Schnatter's medical and treatment records, if any existed, as well as any text messages with Taylor. But Caron refused to release any records without a signed consent form from Schnatter, which he refused to give.
In 2024, a federal judge ordered Schnatter to turn over any records related to treatment at Caron. The order covered any records related to Schnatter's "attendance at a hospital, in-patient, outpatient, rehabilitation center, clinic, and/or other type of medical facility related to your use of, abuse of, and/or addiction to alcohol or any other drug."
The Aug. 30, 2024, deadline came and went as Schnatter's attorneys filed numerous motions to keep his records private. It wasn't until April 17, 2026, that Schnatter's attorneys turned over the records, though they remain under seal.
Again, Schnatter fought arbitration at every turn. He wanted the publicity of a jury trial, to get all this out in the open. And he won a key legal battle in September 2025, when the U.S. Court of Appeals for the Sixth Circuit rejected Laundry Service's efforts to avoid a jury trial.
"I've fought for years to defend my name against a false and malicious attack, and the Sixth Circuit has affirmed that the facts — and the law — are on our side," Schnatter said in a written statement after that ruling.
But something flipped. Less than three weeks after turning over the medical and treatment records, Schnatter came to the table for the first time. On May 5, 2026, the two sides said they'd begun "substantive settlement discussions through a third-party mediator."
Then on Monday, May 11, they settled the case. According to the joint filing, Schnatter dismissed the lawsuit with prejudice, and Laundry Service consented.
In a joint statement Thursday, the two sides announced the settlement and said Laundry Service "agreed to make a charitable donation." The specific terms weren't disclosed.
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