John Schnatter, the founder and public face of popular American pizza chain Papa John's, has resigned as the company's chairman, hours after apologising for using a racial remark during a conference call, US media reports said today.

Schnatter, a Trump donor, had stepped down as the pizza corporation's chief executive in January after he said that National Football League player protests of racial injustice were hurting the company's pizza sales.

According to a report in the 'Forbes', Schnatter, 56, had used the N-word while participating in a role-playing exercise designed to prevent public relations crises with a marketing agency.

Schnatter confirmed the allegation in his apology.

"News reports attributing the use of inappropriate and hurtful language to me during a media training session regarding race are true. Regardless of the context, I apologise. Simply stated, racism has no place in our society," CNN reported, quoting the company's statement.

The company has accepted the resignation of Schnatter as Chairman of the Board, the statement said yesterday, adding it would appoint a new chairman "in the coming weeks".

Schnatter founded Papa John's in 1984. He is the public face of the company and its largest shareholder, controlling 29 per cent and appears in its ads, the report said.

Papa John's is the third largest pizza chain in the US by sales after Domino's and Pizza Hut.

It has stores in dozens of countries around the world, spanning Latin America, Europe, the Middle East and in Asia, including India.