What constitutes franchisee insolvency that would trigger automatic termination of the Bojangles franchise agreement?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPTS (FDD pages 82–573)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, a franchisee will be considered in default of their franchise agreement, leading to automatic termination without notice, under specific insolvency-related conditions. These conditions include the franchisee becoming insolvent or making a general assignment for the benefit of creditors.
Further conditions that trigger automatic termination involve the filing of a bankruptcy petition by the franchisee, or if such a petition is filed against them and not opposed. Adjudication as bankrupt or insolvent also constitutes default. Additionally, the filing of a bill in equity or other proceeding for the appointment of a receiver for the franchisee's business or assets, if consented to by the franchisee, results in automatic termination.
The appointment of a receiver or other custodian (whether permanent or temporary) for the franchisee's assets or property by a court of competent jurisdiction also triggers this clause. Finally, the institution of proceedings for a composition with creditors under any state or federal law, whether initiated by or against the franchisee, leads to automatic termination of the Bojangles franchise agreement.