Does the Bojangles Developer have an opportunity to cure a default if they become insolvent?
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 the 2025 Bojangles Franchise Disclosure Document, a Bojangles Developer does not have an opportunity to cure a default if they become insolvent. The agreement automatically terminates without notice if the Developer becomes insolvent, makes an assignment for the benefit of creditors, files for bankruptcy (or has a petition filed against them that they do not oppose), is adjudicated bankrupt or insolvent, consents to the appointment of a receiver, or institutes proceedings for composition with creditors.
This lack of a cure period in cases of insolvency is a significant point for potential Bojangles developers. It means that if the developer's financial situation deteriorates to the point of insolvency, Bojangles can immediately terminate the agreement. This is stricter than the standard default clauses, which typically allow a period to remedy the default.
This provision highlights the importance of maintaining strong financial health as a Bojangles developer. The automatic termination clause underscores the potential risks associated with financial instability and the need for careful financial planning and management. Prospective developers should carefully consider their financial resources and risk tolerance before entering into a development agreement with Bojangles.