In the event of a contested termination of the Bojangles franchise agreement, who operates the restaurant during the dispute, and what are their obligations regarding profits?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event that this Agreement is terminated and Franchisee contests the validity of the termination, the party that operates the Restaurant during the period commencing with the date that notice of termination was given and ending with the date upon which a final notice and nonappealable judgment resolving the issue is entered, shall operate the Restaurant for the benefit of the prevailing party in such contest, and shall account for, and pay over, any profits earned during said period to the other party, if such other party is the party that prevails.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, in the event of a contested termination of the franchise agreement, the party that operates the Bojangles restaurant during the dispute is determined by the notice of termination. This period begins with the date the termination notice is given and concludes when a final, non-appealable judgment is entered to resolve the issue.
The party operating the restaurant, whether it's the franchisee or Bojangles, does so for the benefit of whoever ultimately prevails in the dispute. This means that the operator must account for all profits earned during this period.
At the end of the legal proceedings, the operator is obligated to pay over any profits earned during the contested period to the party that prevails in the dispute. This ensures that the financial benefits of the restaurant operation accrue to the rightful party as determined by the final judgment.