What conditions may Bojangles require for approval of a transfer that results in a change of controlling interest in the franchise?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
each of this Agreement, for which Franchisor may then terminate without opportunity to cure pursuant to Paragraph XIV.B. of this Agreement.
- (3) If a transfer, alone or together with other previous, simultaneous, or proposed transfers, would have the effect of transferring a controlling interest in the Restaurant, interest in this Agreement, or in the franchise rights or license rights granted hereunder, or in Franchisee, Franchisor may, in its sole discretion, if it does not elect to exercise its option to purchase set forth in Paragraph XIII.C. herein, require any or all of the following as conditions of its approval:
- (a) All of Franchisee's accrued and outstanding monetary obligations to third parties and all accrued and outstanding obligations to Franchisor, or any parent, subsidiary or affiliate of Franchisor shall have been satisfied;
- (b) Franchisee shall not be in default of any provision of this Agreement, any amendment hereto or successor hereof, or any other agreement between Franchisee and Franchisor, its parents, subsidiaries, or affiliates;
- (c) The transferor shall have executed a general release under seal, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders, and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state, and local laws, rules, and ordinances; and shall agree to remain liable to Franchisor for all affirmative obligations, covenants, and agreements contained herein for two (2) years following the effective date of transfer (or, if transferor retains a purchase money interest in the transferred business, for a period greater than two (2) years, until the interest is extinguished) or for such shorter period as Franchisor may, in its sole discretion, determine;
- (d) The transferee shall enter into a written assignment, under seal and in a form satisfactory to Franchisor, assuming and agreeing to discharge all of Franchisee's
obligations under this Agreement; and, if the obligations of Franchisee were guaranteed by the transferor, the transferee shall guarantee the performance of all such obligations in writing in a form satisfactory to Franchisor;
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, if a transfer results in a change of controlling interest in the restaurant, franchise agreement, or franchise rights, Bojangles has the discretion to set conditions for approval, provided they do not exercise their option to purchase the franchise. These conditions can include several requirements pertaining to the franchisee and the party to whom the franchise is being transferred.
One condition is that all of the franchisee's outstanding monetary obligations to third parties and to Bojangles, its parents, subsidiaries, or affiliates must be satisfied. The franchisee must also not be in default of any provision of the Franchise Agreement, any amendments to it, or any other agreements with Bojangles or its affiliates. This ensures that the franchise is in good financial and legal standing before the transfer occurs.
Additionally, the transferor (the current franchisee) must execute a general release, in a form satisfactory to Bojangles, releasing any claims against Bojangles and its officers, directors, shareholders, members, and employees. The transferor must also agree to remain liable to Bojangles for all affirmative obligations, covenants, and agreements for two years following the transfer, or longer if they retain a purchase money interest in the business until that interest is extinguished, unless Bojangles determines a shorter period. The transferee (the new franchisee) must enter into a written assignment, in a form satisfactory to Bojangles, agreeing to fulfill all of the franchisee's obligations under the Franchise Agreement. If the transferor guaranteed the franchisee's obligations, the transferee must also provide a written guarantee in a form satisfactory to Bojangles. These conditions protect Bojangles's interests and ensure the new franchisee is fully committed to the agreement.