Papa John’s is attempting to ward off its disgraced founder by adopting a “poison pill” plan.

The pizza company is struggling to distance itself from John Schnatter, who resigned as chairman this month after his use of a racial slur during a media training session was revealed.

He stepped down late last year as CEO after becoming enmeshed in the national anthem issue involving NFL players, saying it was hurting pizza sales.

Mr Schnatter, who later said his resignation was a mistake, is still the pizza chain’s biggest shareholder. He founded the company in 1984.

So-called poison pill shareholder rights plans are typically used as a defensive tactic for firms to avoid a hostile takeover.

Papa John’s, based in Louisville, Kentucky, said it will put its shareholder rights plan in place for a year.

John Schnatter
Mr Schnatter reportedly used a racial slur during a media training event (AP)

The plan would be activated if anyone acquires 15% or more of the company’s outstanding shares without board approval.

That would effectively prevent Mr Schnatter, who holds 30% of all outstanding stock, from gaining a controlling stake in the company.

The company said the plan will not keep its board from considering any offer that is fair and in the best interest of shareholders.

Papa John’s International has started scrubbing Mr Schnatter’s image from its marketing materials and has said it is evaluating all of its ties with him. Mr Schnatter still serves as a board member.

The firm is holding off Mr Schnatter as it struggles to reinvigorate the brand.

Shares of Papa John’s International are down more than 30% over the past year.