What is the consequence if a Bojangles franchisee transfers interest in the agreement without franchisor consent?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
- (8) If Franchisee ceases to operate or otherwise abandons, or attempts to cease to operate or abandon, the Restaurant or enters into an agreement to sell, or sells, or purports or attempts to sell, the real property upon which the Restaurant is situated, or substantially all right, title and interest in and to the Restaurant or real property lease, or substantially all of the assets of Franchisee or of the Restaurant, without Franchisor's prior written consent; provided, however, that upon the occurrence of any of the foregoing events, Franchisor may, in lieu of immediate termination of this Agreement, request from Franchisee, a statement of intentions and assurances that no event in breach of this Agreement is so contemplated, which statement and assurances shall be delivered in writing within twenty-four (24) hours of Franchisor's request.
In addition, Franchisor may request, and Franchisee shall provide within five (5) business days thereafter, a performance bond from Franchisee, the amount of such bond and the issuing entity to be solely at Franchisor's reasonable discretion.
Source: Item 23 — RECEIPTS (FDD pages 82–573)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, if a franchisee attempts to transfer interest in the franchise agreement without obtaining prior written consent from Bojangles, it constitutes a default under the agreement. Specifically, if a franchisee enters into an agreement to sell, sells, or attempts to sell the real property upon which the restaurant is situated, or substantially all right, title, and interest in and to the restaurant or real property lease, or substantially all of the assets of the franchisee or of the restaurant, without Bojangles's prior written consent, it is a breach of the agreement.
In the event of such an unapproved transfer attempt, Bojangles has the option to take certain actions. Instead of immediately terminating the agreement, Bojangles may request a written statement of intentions and assurances from the franchisee, within 24 hours, confirming that no breach is intended. Additionally, Bojangles can request the franchisee to provide a performance bond within five business days, with the amount and issuing entity determined at Bojangles's discretion.
However, if the franchisee fails to provide the requested assurances or performance bond, or if the unauthorized transfer proceeds, Bojangles retains the right to terminate the franchise agreement. This highlights the importance of obtaining Bojangles's prior written consent before any transfer of ownership or controlling interest in the franchise to avoid potential termination and associated penalties.