If the Addendum is terminated, what are the immediate financial obligations of the Developer to Bojangles regarding Franchise Fee Reductions received for any Qualifying Restaurant?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Effect of Termination. If this Addendum is terminated, then:
- (1) Developer will not be entitled to receive any further development incentives under the Program, including the Franchise Fee Reduction and the Royalty Fee Reduction for future Restaurants that Developer develops;
- (2) The Developer must immediately pay Franchisor an amount equal to the Franchise Fee Reduction Developer received for any Qualifying Restaurant; and (3) The Royalty Fee Reduction for any Qualifying Restaurant will immediately terminate and Developer must immediately begin paying Franchisor a royalty fee at the standard rate specified in the Franchise Agreement for the Qualifying Restaurant.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, if the Equipment Reimbursement Incentive Program Addendum is terminated, the developer faces specific financial obligations. The developer must immediately pay Bojangles an amount equal to the Franchise Fee Reduction they received for any Qualifying Restaurant. This means that any discount or reduction on the standard franchise fee that the developer benefited from due to the incentive program must be repaid to Bojangles upon termination of the addendum.
In addition to repaying the franchise fee reduction, the royalty fee reduction for any Qualifying Restaurant will immediately terminate. The developer must then begin paying Bojangles a royalty fee at the standard rate specified in the Franchise Agreement for the Qualifying Restaurant. This implies that the developer will lose any reduced royalty rate benefits they were receiving as part of the incentive program and will be required to pay the full, standard royalty fee moving forward.
These financial repercussions highlight the importance of adhering to the terms and conditions of the Equipment Reimbursement Incentive Program Addendum. Termination can occur due to events such as transferring ownership interests, failing to meet development schedule deadlines, or defaulting on agreements with Bojangles. Prospective developers should carefully consider these potential consequences and ensure they can meet all obligations to avoid termination and the associated financial burdens.