John Schnatter, founder and the face of Papa John’s (PZZA), has stepped down as chairman of the company after news that he used a racial slur during a conference call in May.

In an emailed statement to Forbes on Wednesday, Schnatter confirmed his use of the word during a “media training session,” and said, “Regardless of the context, I apologize. Simply stated, racism has no place in our society.”

News of the incident was followed by a 4.8% drop in share price of Papa John’s by Wednesday’s close.

Yet, the company has surged nearly 12% on Thursday after Schnatter officially resigned as chairman of the company’s board.

According to CNBC’s Jim Cramer, execs in the pizza industry believe Papa John’s is “falling apart,” especially when compared to its main competitor, Domino’s Pizza (DPZ).

Watch Cramer’s full analysis below:

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