Does Bojangles grant the franchise agreement based on the franchisee's business skills and financial capacity?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
f the Franchisor Parties on any of the Claims released by this paragraph. Franchisee agrees that fair consideration has been given by Franchisor for this release and it fully understands that this is a negotiated, complete, and final release of all Claims.
- 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.
- D. At least six (6) months prior to opening the Restaurant, Franchisee shall designate an individual to serve as Franchisee's "Designated Operator" subject to the following conditions:
- (1) The Designated Operator shall devote full time and best efforts to the supervision and conduct of the Franchised Business and any other Bojangles restaurants which may be operated by Franchisee;
- (2) The Designated Operator must attend and successfully complete, to Franchisor's satisfaction, the initial training program offered by Franchisor;
- (3) The Designated Operator shall execute a Confidentiality Agreement in the form required by Franchisor;
- (4) No person shall become a Designated Operator unless approved by Franchisor; and
- (5) If the Designated Operator is unable, or elects not, to continue to meet his/her obligations hereunder, or if, in Franchisor's sole discretion, the Designated Operator no longer qualifies to act as such, Franchisee shall promptly designate another Designated Operator subject to the same conditions and qualifications listed above. Franchisee's replacement Designated Operator must successfully complete Franchisor's initial training program within one hundred eighty (180) days after being appointed as Franchisee's Designated Operator.
- E. Franchisee agrees that it is important to the operation of the System and the Restaurant that Franchisee and Franchisee's employees receive such training as Franchisor may require, and to that end agrees as follows:
- (1) Prior to the opening of the Restaurant, the Managing Owner and Designated Operator, if they have not each previously attended the initial training program, and such number of Franchisee's managers as Franchisor shall designate, shall attend and successfully complete, to Franchisor's satisfaction, the initial training program offered by Franchisor. At Franchisee's expense, the Managing Owner, Designated Operator and Franchisee's managers and other employees who work in the Restaurant shall also attend such courses, seminars, and other training programs as Franchisor may require from time to time. Franchisor shall provide instructors and training materials for all required training programs; and Franchisee or its employees shall be responsible for any and all other expenses incurred by them in connection with any training programs, including, without limitation, the cost of transportation, lodging, meals, and wages.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Bojangles requires a designated Managing Owner who meets specific criteria related to business skills and equity interest. The Managing Owner is the primary point of contact with Bojangles and has the authority to make financial, operational, and legal decisions for the franchise. To qualify, the Managing Owner must be approved by Bojangles, own a majority equity interest (or the next highest percentage), and successfully complete the initial training program. If the Managing Owner can no longer fulfill their obligations, a replacement must be appointed and also complete the training program within 180 days.
Additionally, Bojangles mandates the designation of a Designated Operator at least six months before the restaurant opens. This individual must devote full-time efforts to supervising the Bojangles restaurant and complete the initial training program. The Designated Operator also needs to sign a confidentiality agreement.
Bojangles also retains the right to review and audit the franchisee's financial records. Franchisees must submit financial statements attested to by their chief financial officer, and Bojangles can request audited statements. They can also require the franchisee's accountant to consult with Bojangles. Furthermore, Bojangles can inspect and copy the franchisee's books, records, and tax returns, and conduct independent audits. If underreporting is discovered, the franchisee must pay the understated amount plus interest, and cover inspection costs if the understatement is significant (5% or more). These stipulations suggest that Bojangles places importance on the franchisee's financial management and operational capabilities.
While the FDD excerpts do not explicitly state that the franchise agreement is granted based on business skills and financial capacity, the requirements for a Managing Owner and Designated Operator, along with the financial reporting and auditing rights retained by Bojangles, strongly imply that these factors are significant considerations in the franchise approval process. A prospective franchisee should directly inquire with Bojangles about the specific criteria and evaluation process used to assess a candidate's business skills and financial capacity.