Can a Bojangles franchisee form separate legal entities to operate individual Restaurants?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
TUAL OPERATION OF THE FRANCHISE BUSINESS**
You must be a corporation or a limited liability company composed solely of no more than six shareholders/members who are natural persons and not corporations, limited liability companies, or any other legal entities in order to be a developer or franchisee. You must complete an Affidavit of Ownership, the form of which is attached as Exhibit I, when you sign the Development Agreement and/or Franchise Agreement. You may not form separate legal entities to operate your individual Restaurants. In addition, you cannot be owned by two owners who each own 50% of your ownership interests.
Your Managing Owner will be the person with whom we will communicate and will have the authority to bind you with respect to all financial, operational and legal matters related to the Franchised Business and your Development Agreements and Franchise Agreements with us. The Managing Owner shall own a majority of your equity interests during the entire period s/he serves as Managing Owner. If you do not have an owner with a majority equity interest, the Managing Owner shall own the next highest percentage equity interest during the entire period s/he serves as Managing Owner. The same individual may serve as your Managing Owner of all the franchised Restaurants controlled by you. Your Managing Owner must: (1) successfully complete our initial training program; (2) execute the Development Agreement and Franchise Agreement and be individually bound by all your obligations under those agreements; and (3) be approved by us. The Managing Owner may also serve as your Designated Operator as described below provided that the Managing Owner meets the criteria for both positions independently.
Your Designated Operator must devote his or her full time and best efforts to the supervision and conduct of the Restaurants that you develop and operate during the entire period that s/he serves as Designated Operator. The same individual may serve as your Designated Operator of all the franchised Restaurants controlled by you. Your Designated Operator must: (1) be appointed six (6) months prior to the first Restaurant opening; (2) successfully complete our initial training program; (3) be approved by us; and (4) execute a confidentiality agreement in the form required by us.
If a Managing Owner or Designated Operator is unable or elects not to continue to meet his or her obligations as Managing Owner or Designated Operator, or if, in our sole discretion, a Managing Owner or Designated Operator no longer qualifies to act as such, you must promptly designate another Managing Owner and/or Designated Operator subject to the same conditions and qualifications listed above. Your replacement Managing Owner and/or Designated Operator must successfully complete our initial training program within 180 days after being appointed.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 53–54)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, a franchisee is prohibited from forming separate legal entities to operate individual restaurants. The FDD specifies that franchisees must be a corporation or limited liability company with no more than six shareholders/members, who must be natural persons, not other legal entities. Additionally, the ownership structure cannot consist of two owners each holding 50% of the ownership interests.
This restriction means that a Bojangles franchisee must operate all of their franchised locations under a single legal entity, simplifying the management structure but potentially increasing liability exposure across all locations. It also ensures that Bojangles deals with a single, unified entity responsible for all franchise obligations.
The Managing Owner plays a crucial role, serving as the primary point of contact with Bojangles and possessing the authority to bind the franchisee on all financial, operational, and legal matters. This individual must own a majority of the equity interests or, if no majority owner exists, hold the next highest percentage. The same individual can serve as the Managing Owner for all franchised restaurants controlled by the franchisee, streamlining communication and decision-making. Each individual who owns an interest in the franchise must sign a guarantee, binding them to the terms of the agreements and guaranteeing the payment of all liabilities.