In the event of termination for a Bojangles franchisee's default, what does the franchisee owe Bojangles, and what security interest does Bojangles have?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
NOW THEREFORE, in consideration of mutual covenants set forth herein, the execution and delivery of the Lease, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Franchisee hereby agree as follows:
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- Landlord shall deliver to Franchisor a copy of any notice of default or termination of the Lease at the same time such notice is delivered to Franchisee.
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- Franchisee hereby assigns to Franchisor, with Landlord's irrevocable and unconditional consent, all of Franchisee's rights, title and interests to and under the Lease upon any termination, expiration, or non-renewal of the Franchise Agreement, but no such assignment shall be effective unless: (a) the Franchise Agreement is terminated, not renewed, or expires without renewal or Franchisor has exercised its option to purchase the Restaurant under the Franchise Agreement, as applicable; and (b) Franchisor notifies Franchisee and Landlord in writing that Franchisor assumes Franchisee's obligations under the Lease.
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- Franchisor shall have the right, but not the obligation, upon giving written notice of its election to Franchisee and Landlord, to cure any breach of the Lease and, if so stated in the notice, to also succeed to Franchisee's rights, title and interests thereunder.
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- Terms of the Lease that relate to or impact this Addendum may not be modified without Franchisor's prior written consent. The Lease may not be assigned by Franchisee without Franchisor's prior written consent.
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- Franchisee and Landlord acknowledge and agree that Franchisor shall have no liability or obligation whatsoever under the Lease unless and until Franchisor assumes the Lease in writing pursuant to Section 2 or Section 3, above.
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- If Franchisor assumes the Lease, as provided above, Franchisor may, without Landlord's prior consent, further assign the Lease to (a) an affiliate of Franchisor or as part of Franchisor's financing or refinancing of its assets; or (b) to an approved franchisee of Franchisor to operate the Bojangles restaurant at the Premises provided that the following
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, a Bojangles franchisee is considered in default of their agreement under various circumstances, including insolvency, failure to comply with agreement requirements, or termination of other agreements with Bojangles. Upon default, Bojangles has specific rights regarding the lease of the restaurant property.
Specifically, Bojangles is entitled to receive copies of any default or termination notices related to the property lease. The franchisee irrevocably assigns their rights, title, and interests in the lease to Bojangles upon termination or non-renewal of the franchise agreement, or if Bojangles exercises its option to purchase the restaurant. This assignment becomes effective when Bojangles notifies both the franchisee and the landlord in writing that it will assume the franchisee's obligations under the lease.
Furthermore, Bojangles has the right, but not the obligation, to cure any breach of the lease and succeed to the franchisee's rights and interests by providing written notice to the franchisee and landlord. Bojangles can also assign the lease to an affiliate or another approved franchisee without the landlord's consent under certain conditions. This ensures Bojangles can maintain control over the restaurant location even if the original franchisee defaults.