What are the equity interest requirements for an individual to serve as the Managing Owner for a Bojangles franchise?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. Franchisee shall designate an individual to serve as Franchisee's "Managing Owner", subject to the following conditions:
- (1) The Managing Owner shall own a majority equity interest in Franchisee during the entire period s/he serves as Managing Owner. If Franchisee does not have an owner with a majority equity interest, the Managing Owner shall own the next highest percentage equity interest in Franchisee during the entire period s/he serves as Managing Owner;
- (2) The Managing Owner will be the person with whom Franchisor will communicate and will have the authority to bind Franchisee with respect to all financial, operational and legal matters related to the Franchised Business and this Agreement. The Managing Owner may also serve as Franchisee's Designated Operator as defined below provided that the Managing Owner meets the criteria for both positions independently;
- (3) The Managing Owner must attend and successfully complete, to Franchisor's satisfaction, the initial training program offered by Franchisor;
- (4) The Managing Owner shall execute this Agreement, and shall be individually bound by all obligations of Franchisee hereunder;
- (5) No person shall become a Managing Owner unless approved by Franchisor; and
- (6) The Managing Owner as of the Effective Date is identified on Exhibit A. If the Managing Owner is unable, or elects not, to continue to meet his/her obligations hereunder, or if, in Franchisor's sole discretion, the Managing Owner no longer qualifies to act as such, Franchisee shall promptly designate another Managing Owner subject to the same conditions and qualifications listed above. Franchisee's replacement Managing Owner must successfully complete Franchisor's initial training program within one hundred eighty (180) days after being appointed as Franchisee's Managing Owner.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, the Managing Owner of a franchise must meet specific equity interest requirements. Generally, the Managing Owner must own a majority equity interest in the franchise during their entire tenure as Managing Owner. This implies that the individual should hold more than 50% of the ownership stake in the Bojangles franchise.
However, there is an exception to this rule. If the franchise does not have an owner with a majority equity interest, the Managing Owner is required to own the next highest percentage equity interest in the franchise. This provision accommodates situations where ownership is more evenly distributed among multiple partners, ensuring that the Managing Owner still has a significant stake and vested interest in the business's success.
This requirement ensures that the Managing Owner is fully committed to the Bojangles franchise and has the authority to make key decisions. It also aligns their interests with those of the franchisor, promoting effective management and operational efficiency. Additionally, the franchise agreement stipulates that a franchisee cannot be owned by two owners who each have 50% ownership, preventing potential deadlocks in decision-making.
Prospective franchisees should carefully consider these equity requirements and ensure that their ownership structure aligns with Bojangles's stipulations for the Managing Owner role. This includes understanding the implications for control, decision-making authority, and the overall management of the franchise. Franchisees must also maintain a current list of all owners and their equity interests, providing this information to Bojangles upon request.