What happens if a Bojangles franchisee or its affiliates defaults on another Franchise Agreement or Development Agreement with the Franchisor?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition Franchisor may request, and Franchisee shall provide within five (5) business days thereafter, a performance bond from Franchisee, the amount of such bond and the issuing entity to be solely at Franchisor's reasonable discretion.
- (8) If any other Franchise Agreement or Development Agreement for Bojangles restaurants or any other agreements with Franchisor or its affiliates entered into by Franchisee or its affiliates (or any beneficial owner(s) of Franchisee or its affiliates) is terminated based upon Franchisee's or its affiliates' (or any beneficial owner(s) of Franchisee's or its affiliates') default thereunder;
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles' 2025 Franchise Disclosure Document, if a franchisee or its affiliates defaults on another Franchise Agreement or Development Agreement with Bojangles or its affiliates, it can trigger a default under the current agreement. Specifically, if any Franchise Agreement, Development Agreement, or other agreement with Bojangles or its affiliates is terminated due to a franchisee's or their affiliates' default, this constitutes a default under the present agreement. This condition extends not only to the franchisee but also to any beneficial owners of the franchisee or its affiliates.
This provision is significant because it creates a cross-default scenario. A failure to meet obligations under one agreement with Bojangles can have repercussions on other agreements the franchisee or its affiliates may have. This interconnectedness means that the financial health and operational compliance of all related entities are crucial for maintaining good standing across the entire franchise network.
For a prospective Bojangles franchisee, this highlights the importance of carefully managing all contractual relationships with the franchisor. It also underscores the need to ensure that all affiliated entities and beneficial owners are aware of and compliant with the terms of their respective agreements with Bojangles. This clause aims to protect Bojangles by ensuring consistent compliance and performance across all franchisees and their related parties, reducing the risk of financial or operational instability within the franchise system.