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Olson Engage, which signed on as Papa John's public relations agency of record in February, said Thursday that it has resigned the troubled account. But its media agency, IPG Mediabrands' Initiative, says it will continue to work with the pizza chain.

On Wednesday, news of founder John Schnatter's use of the "n"-word in a May conference call, first reported by Forbes, resulted in his resignation as chairman of the board, though he remains a member.

The PR agency says it was not on the call with Papa John's and the chain's then-agency, Laundry Service, during which Schnatter used the racial slur.

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