What constitutes a default that allows Bojangles to terminate the franchise agreement immediately upon notice?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Franchisee shall be deemed to be in default under this Agreement, and all rights granted herein shall automatically terminate without notice to Franchisee, if Franchisee shall become insolvent or make a general assignment for the benefit of creditors; or if a petition in bankruptcy is filed by Franchisee or such a petition is filed against Franchisee and not opposed by Franchisee; or if Franchisee is adjudicated a bankrupt or insolvent; or if a bill in equity or other proceeding for the appointment of a receiver of Franchisee or other custodian for Franchisee's business or assets is filed and consented to by Franchisee; or if a receiver or other custodian (permanent or temporary) of Franchisee's assets or property, or any part thereof, is appointed by any court of competent jurisdiction; or if proceedings for a composition with creditors under any state or federal law should be instituted by or against Franchisee.
- B. Upon occurrence of any of the following events, Franchisee shall be deemed to be in default and Franchisor may, at its option, terminate this Agreement and all rights granted hereunder, without affording Franchisee any opportunity to cure the default, effective immediately upon receipt of notice by Franchisee:
- (1) If Franchisee fails to: obtain Franchisor's approval of a site for the Restaurant by the Site Approval Deadline; commence construction of the Restaurant and pay the Franchise Fee by the Construction Commencement Deadline; or construct, furnish, and open the Restaurant by the Opening Deadline;
- (2) If Franchisee or any shareholder or member of Franchisee is convicted of a felony, a crime involving moral turpitude, or any other crime or offense that is reasonably likely, in the sole opinion of Franchisor, adversely to affect the System, the Proprietary Marks, the Trade Dress the goodwill associated therewith, or Franchisor's interest therein;
- (3) If Franchisee or any shareholder or member of Franchisee purports to transfer any interest in this Agreement, any rights hereunder, including but not limited to any rights to operate the Restaurant, franchise and license rights or obligations under this Agreement or any
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, there are several conditions under which Bojangles can terminate the franchise agreement immediately without providing an opportunity for the franchisee to cure the default. These include specific failures related to the restaurant's site approval and construction deadlines. Specifically, if the franchisee fails to obtain Bojangles's approval of a site by the Site Approval Deadline, fails to commence construction and pay the franchise fee by the Construction Commencement Deadline, or fails to construct, furnish, and open the restaurant by the Opening Deadline, Bojangles can terminate the agreement immediately.
Additionally, Bojangles can immediately terminate the agreement if the franchisee or any shareholder or member of the franchisee is convicted of a felony, a crime involving moral turpitude, or any other crime or offense that could adversely affect the Bojangles system, proprietary marks, trade dress, or goodwill. Furthermore, if the franchisee attempts to transfer any interest in the agreement or rights to operate the restaurant without Bojangles's consent, it constitutes an immediate default.
Another condition for immediate termination without notice occurs if the franchisee becomes insolvent, makes an assignment for the benefit of creditors, files for bankruptcy, or has a receiver appointed for their business or assets. These stipulations are designed to protect Bojangles's brand and financial interests by ensuring franchisees meet critical development milestones, maintain legal and ethical standards, and remain financially stable. These terms are fairly standard in the franchise industry, as franchisors need to protect their brand and system standards.
Prospective franchisees should carefully consider these conditions, as any of these events could lead to the immediate loss of their franchise. It is important to understand the implications of these defaults and to ensure compliance with all terms of the franchise agreement to avoid termination.