What happens if a Bojangles franchisee dies or becomes mentally incapacitated, and their interest is not transferred to an approved third party within the specified timeframe?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon the death or mental incapacity of any person with a direct or indirect interest in this Agreement or in Developer, the executor, administrator, or personal representative of such person shall transfer the interest to a third party, including shareholder(s) or member(s) of Developer, approved by Franchisor within twelve (12) months after such death or mental incapacity or, if legal proceedings make transfer within twelve (12) months not feasible, within such longer period as may be reasonable under the circumstances.
Such transfer, including, without limitation, transfer by devise or inheritance, shall be subject to the same conditions as any inter vivos transfer.
If an approved transfer has not been made within the aforementioned period, Franchisor shall have the option to purchase all (but not less than all) of the Restaurants developed by Developer hereunder at fair market value, and thereupon terminate this Agreement.
Such transfer, including, without limitation, transfer by devise or inheritance, shall be subject to the same conditions as any inter vivos transfer.
If an approved transfer has not been made within the aforementioned period, Franchisor shall have the option to purchase the Franchised Business at fair market value, and thereupon terminate this Agreement.
In the event that Franchisor elects to purchase the Franchised Business and terminate this Agreement in accordance with the foregoing, closing of the transaction shall take place as promptly as possible after Franchisor exercises its option to purchase, and the parties reach agreement concerning the fair market value of the Franchised Business.
Payment will be made in four (4) installments, the first of which shall be made at the time of closing and the remaining three (3) installments shall each be made at one (1) year intervals from the date of the first payment.
Interest shall be payable on the unpaid portion of the purchase price on the due date of each installment of principal at the prime rate of Bank of America on the date of Franchisor's election to purchase the Franchised Business.
If the parties are unable to agree on the fair market value of the Franchised Business, then the dispute will be settled by binding arbitration in Charlotte, North Carolina, in accordance with the rules and procedures of the American Arbitration Association.
Source: Item 23 — RECEIPTS (FDD pages 82–573)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, in the event of the death or mental incapacitation of a person with interest in the franchise agreement, their representative has a period of twelve months to transfer the interest to a Bojangles-approved third party. This transfer is subject to the same conditions as any other transfer made during the franchisee's lifetime. However, if legal proceedings impede the transfer within this timeframe, a reasonable extension may be granted.
If the transfer to an approved party does not occur within the specified period, Bojangles retains the option to purchase all of the restaurants developed by the developer at fair market value. Upon exercising this option, Bojangles will terminate the franchise agreement.
If Bojangles elects to purchase the franchise, the closing of the transaction should occur promptly after Bojangles exercises its purchase option and both parties agree on the fair market value of the franchised business. Payment will be made in four installments: the first at closing, and the remaining three annually thereafter. Interest will be paid on the outstanding balance at the Bank of America prime rate on the date Bojangles elects to purchase the business. If an agreement on fair market value cannot be reached, the matter will be settled through binding arbitration in Charlotte, North Carolina, following the rules of the American Arbitration Association.