If Bojangles does not exercise its option to purchase a franchise being transferred, can it require certain conditions for approval?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
(3) If a transfer, alone or together with other previous, simultaneous, or proposed transfers, would have the effect of transferring a controlling interest in the Restaurant, interest in this Agreement, or in the franchise rights or license rights granted hereunder, or in Franchisee, Franchisor may, in its sole discretion, if it does not elect to exercise its option to purchase set forth in Paragraph XIII.C. herein, require any or all of the following as conditions of its approval:
(a) All of Franchisee's accrued and outstanding monetary obligations to third parties and all accrued and outstanding obligations to Franchisor, or any parent, subsidiary or affiliate of Franchisor shall have been satisfied;
(b) Franchisee shall not be in default of any provision of this Agreement, any amendment hereto or successor hereof, or any other agreement between Franchisee and Franchisor, its parents, subsidiaries, or affiliates;
(c) The transferor shall have executed a general release under seal, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders, and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state, and local laws, rules, and ordinances; and shall agree to remain liable to Franchisor for all affirmative obligations, covenants, and agreements contained herein for two (2) years following the effective date of transfer (or, if transferor retains a purchase money interest in the transferred business, for a period greater than two (2) years, until the interest is extinguished) or for such shorter period as Franchisor may, in its sole discretion, determine;
(d) The transferee shall enter into a written assignment, under seal and in a form satisfactory to Franchisor, assuming and agreeing to discharge all of Franchisee's
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, if a transfer of interest would result in a change of controlling interest in the restaurant, the agreement, or the franchise rights, Bojangles has the option to purchase the interest. However, if Bojangles chooses not to exercise this option, it can still impose certain conditions for approving the transfer.
These conditions may include ensuring that all of the franchisee's outstanding monetary obligations to third parties and Bojangles (or its affiliates) are satisfied. Additionally, the franchisee must not be in default of any agreement with Bojangles or its affiliates. The transferor may also be required to execute a general release of claims against Bojangles and its related parties, and agree to remain liable for obligations for two years after the transfer, or longer if they retain a purchase money interest.
Furthermore, the transferee must enter into a written agreement assuming all of the franchisee's obligations under the franchise agreement. These conditions allow Bojangles to maintain standards and protect its interests even when it does not directly repurchase the franchise during a transfer of ownership.