The University of Louisville, whose stadium Papa John's held the naming rights, has already announced it will remove the logo from the stadium.
"By taking this action, we renew our community's commitment to speaking up when it matters, doing what is right and coming together as one team - our Cardinal family - to heal and move forward", Bendapudi said.
Schnatter used the N-word during a media training exercise, according to Forbes, then reportedly said that Colonel Sanders didn't faced backlash for using the word.
"Absolutely", he said during a press availability in Louisville Friday morning.
During the call, Schnatter had tried to downplay his National Football League remarks, saying "Colonel Sanders called blacks n*****s" as he complained that the KFC founder never faced public backlash.
The pizza chain later said it had accepted Mr Schnatter's resignation and that a new chairman would be appointed in the coming weeks. Schnatter has resigned from the university's board of trustees. The Charles Koch Foundation contributed $4 million to help start the center.
Papa John's has acknowledged in regulatory filings that Schnatter's role as its pitchman could be a liability if his reputation was damaged. It also plans to launch a listening tour and hire an outside auditor on matters of inclusion, it said.
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In a statement on Wednesday, the company said it condemned "racism and any insensitive language".
Bendapudi added that she made the decision unilaterally without consulting anyone else at the university. "Papa John's is a pizza company with 120,000 corporate and franchise team members around the world", he said in a statement.
Schnatter, the face of the pizza chain, resigned Wednesday as chairman of the board after confirming that he used a slur during a PR training session. While he's no longer on the board, John still owns a substantial portion - roughly 30 percent - of the company, CBS points out.
Things have continued to shift in the entire running of Papa John's that seen him already moving toward removing the founder's image from all of their advertising. They ended little changed Friday.
Six MLB teams have now suspended relationships with Papa John's in the wake of founder John Schnatter's admission of using the N-word during a conference call.
The university is not the first sports facility to dump the Papa John's name. The mayor of Jeffersonville, Mike Moore, returned a $400,000 donation from Schnatter to restore the Nachand Fieldhouse, a historic gym. Moreover, the mayor of Schnatter's hometown, Jeffersonville, Ind., removed Schnatter's name from the city's basketball gymnasium.