What constitutes a default under the Bojangles Development Agreement if a receiver is appointed for the Developer's business?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Developer shall be deemed to be in default under this Agreement, and all rights granted herein shall automatically terminate without notice to Developer, if Developer shall become insolvent or make a general assignment for the benefit of creditors; or if a petition in bankruptcy is filed by Developer or such a petition is filed against Developer and not opposed by Developer; or if Developer is adjudicated a bankrupt or insolvent; or if a bill in equity or other proceeding for the appointment of a receiver of Developer or other custodian for Developer's business or assets is filed and consented to by Developer; or if a receiver or other custodian (permanent or temporary) of Developer'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 Developer.
Source: Item 23 — RECEIPTS (FDD pages 82–573)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, a developer is considered in default of their Development Agreement if a receiver or other custodian is appointed to manage the developer's assets or property. This applies whether the receiver is permanent or temporary and is appointed by a court with jurisdiction. Additionally, if the developer consents to a bill in equity or other proceeding for the appointment of a receiver, this also constitutes a default under the agreement.
This provision protects Bojangles by allowing them to terminate the agreement if the developer's business faces financial instability requiring court intervention. The automatic termination clause underscores the importance Bojangles places on the financial health and operational stability of its developers.
For a prospective Bojangles developer, this means that any significant financial distress leading to receivership could result in the immediate termination of their development rights without notice. It is crucial for developers to maintain sound financial management and avoid situations that could lead to the appointment of a receiver to protect their investment and development rights with Bojangles.