Fallon ad agency, which was awarded creative duties for Papa John’s a month ago, has dropped the account due to the controversy surrounding the pizza chain's founder John Schnatter's use of the N-word during a conference call with its former ad agency, Laundry Service of Brooklyn.

"The agency was unaware of the incident with its previous agency and learned about it with the rest of the world,” said a statement from Publicis Group's Fallon. “During our short time with Papa John's, Fallon produced limited product-focused advertising that has yet to air. The agency has decided not to pursue additional business with Papa John's."

Olson Engage, which did PR for Papa John’s, cut ties with the chain last week.

Schnatter, who owns 30 percent of Papa John’s, said he used the N-word during a role-playing exercise in a diversity training session.

"I then said something on the order of, Colonel Sanders used the word 'N,' (I actually used the word,) that I would never use that word and Papa John’s doesn’t use that word," Schnatter wrote in a July 14 letter to Papa John’s board.

"Let me be very clear: I never used the 'N' word in that meeting as a racial epithet, nor would I ever.”

Schnatter now says his resignation was a mistake.

The pizza chain announced July 17 that a special committee of the board hired Akin Gump Strauss Hauer & Feld to oversee an audit and investigate its "existing processes, policies, systems related to diversity and inclusion, supplier and vendor engagement and Papa John's culture.”