What constitutes a material breach of the Bojangles franchise agreement regarding transfer of interest?
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 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to the 2025 Bojangles Franchise Disclosure Document, a material breach regarding transfer of interest occurs if a franchisee ceases to operate or abandons the restaurant, or attempts to do so. It is also a breach if the franchisee enters into an agreement to sell, sells, or attempts to sell the real property where the restaurant is located, or substantially all rights, title, and interest in the restaurant or real property lease, or substantially all of the assets of the franchisee or the restaurant, without obtaining Bojangles' prior written consent.
However, Bojangles may offer an alternative to immediate termination upon the occurrence of any of these events. Bojangles can request a statement of intentions and assurances from the franchisee, confirming that no breach of the agreement is contemplated. The franchisee must provide this statement in writing within 24 hours of the request.
Additionally, Bojangles may request a performance bond from the franchisee, with the amount of the bond and the issuing entity determined at Bojangles' discretion. The franchisee is required to provide this performance bond within five business days of the request. This bond serves as a security measure to ensure the franchisee's compliance with the franchise agreement, even amidst potential transfer of interest concerns.