But the spokesman, Peter Collins, said that it was the right time for Steve Ritchie, 43, the company's president and chief operating officer, to become the next chief executive.
He will be replaced by company president Steve Ritchie.
Schnatter triggered fierce criticism by saying the pizza chain's sales were hurt by the NFL's handling of the controversy over players kneeling during the national anthem to protest police violence and racial injustice.
Some left-wing critics have said that Schnatter's departure as CEO isn't enough to convince them to support the company given that he will remain chairman of the board.
Schnatter drew attention - and support from white supremacists - after saying in November that Papa John's sales were in a slump because the National Football League had not addressed players' protests, which were meant to draw attention to police violence and racial injustice.
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The pizza chain announced on Thursday that founder, John Schnatter, will step down as CEO next month.
Ritchie first started at Papa John's as a customer service representative - making $6 per hour - in 1996, the company said.
"The N.F.L. has hurt us by not resolving the current debacle to the players' and owners' satisfaction", Mr. Schnatter, 56, said on November 1 during a conference call with investors. Two weeks after that conference call, shares of the franchise's stock were down by 12.8 percent.
The chain, based outside Louisville, Kentucky, says it is the third-largest pizza delivery company in the world, with some 5,000 locations.
Schnatter is not leaving Papa John's entirely.
"We believe in the right to protest inequality and support the players' movement to create a new platform for change". That has reduced Schnatter's 9.5 million share stake in the company by almost $84 million. "We also believe together, as Americans, we should honor our anthem", a statement from the company read.