After the Bojangles agreement expires or terminates, for how long is the franchisee restricted from owning or being involved with competing restaurant businesses?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
(2) During the continuing uninterrupted period commencing upon the expiration or termination of this Agreement, regardless of the cause for termination, and continuing for two (2) years thereafter, except as otherwise approved in writing by Franchisor, Franchisee and its shareholders or members shall not, either directly or indirectly, for themselves, or through, on behalf of, or in conjunction with any person, persons, partnership, corporation, or limited liability company, own, maintain, advise, help, invest in, make loans to, be employed by, be the landlord of, engage in, or have any interest in:
(a) Any restaurant business which: (i) competes with any Bojangles restaurant or which sells fried chicken, biscuits and/or biscuit sandwiches, or other items which are featured menu items at Bojangles restaurants as of the termination or expiration of this Agreement, and (ii) is located within ten (10) miles from the Restaurant or any Bojangles restaurant that is open, planned for construction or under construction as of the termination or expiration of this Agreement; or
(b) Any fast food restaurant business which is located (i) within ten (10) miles from the Restaurant or any Bojangles restaurant that is open, planned for construction, or under construction as of the termination or expiration of this Agreement, or (ii) within the designated market area within which the Restaurant is situated.
B.
Paragraph XVI.A. shall not apply to ownership by Franchisee of less than two percent (2%) beneficial interest in the outstanding equity securities of any corporation which is registered under the Securities Exchange Act of 1934.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, franchisees face certain restrictions regarding involvement with competing businesses after the termination or expiration of their franchise agreement. Specifically, for a period of two years following the end of the agreement, franchisees (including their shareholders or members) are prohibited from owning, maintaining, advising, helping, investing in, making loans to, being employed by, being a landlord of, engaging in, or having any interest in competing restaurant businesses without written approval from Bojangles.
These restrictions apply to any restaurant that competes with Bojangles or sells similar items like fried chicken, biscuits, or biscuit sandwiches, and is located within ten miles of the former Bojangles restaurant or any other Bojangles location that is open, planned, or under construction. The restrictions also extend to any fast-food restaurant business within ten miles of a Bojangles restaurant or within the designated market area of the former franchise.
However, there is an exception: the restrictions do not apply if the franchisee owns less than two percent of the equity securities in a corporation registered under the Securities Exchange Act of 1934. This clause aims to prevent franchisees from having a significant stake in competing businesses while allowing minor investments in publicly traded companies. These post-term non-compete clauses are common in franchising to protect the brand and market share of the franchisor.