If Bojangles exercises its option for a transferee to execute a new franchise agreement, is the transferee required to pay an initial franchise fee?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
ed by prior related business experience or otherwise); and has adequate financial resources and capital to operate the Franchised Business;
- (f) At Franchisor's option, the transferee shall execute (and/or, upon Franchisor's request, shall cause all interested parties to execute), for a term ending on the expiration date of this Agreement, the then-current standard form of franchise agreement being offered to new System franchisees and other ancillary agreements, including a guarantee of such agreement executed by all shareholders of the transferee, as Franchisor may require for the Franchised Business, which agreements shall supersede this Agreement in all respects and the terms of which agreements may differ from the terms of this Agreement, including, without limitation, a higher percentage royalty rate and advertising contribution; provided, however, that the transferee shall not be required to pay an initial Franchise Fee;
- (g) At Franchisor's sole discretion, the transferee, at its expense, shall upgrade the Restaurant to conform to the then-current standards and specifications of System restaurants, and shall complete the upgrading and other requirements within the time specified by Franchisor:
- (h) Franchisee shall remain liable for all of its obligations to Franchisor in connection with the Franchised Business prior to the effective date of the transfer, and shall execute any and all instruments reasonably requested by Franchisor to evidence such liability;
- (i) At the transferee's expense, transferee's Managing Owner, Designated Operator, and managers, shall complete any training and certification programs then in effect for franchisees upon such terms and conditions as Franchisor may reasonably require; and
- (j) Franchisee shall pay to Franchisor a transfer fee of five thousand dollars ($5,000) per Restaurant, which constitutes Franchisor's reasonable costs and expenses (including legal and accounting expenses) in connection with Franchisor's review of the application to transfer.
- (4) Franchisee shall grant no security interest in this Agreement or in the Franchised Business (other than a pledge of assets to secure a bona fide loan made or credit extended in connection with acquisition of the assets pledged) unless the secured party agrees that in the event of any default by Franchisee under any documents related to the security interest, Franchisor shall have the right and option to purchase the rights of the secured party upon payment of all sums then due to such secured party.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, if Bojangles exercises its option for a transferee to execute a new franchise agreement, the transferee is not required to pay an initial franchise fee. However, Bojangles may request the transferee to execute the then-current standard form of franchise agreement for a term ending on the expiration date of the original agreement. The terms of the new agreement may differ from the original agreement, potentially including a higher percentage royalty rate and advertising contribution.
Even though the transferee won't have to pay an initial franchise fee, they must still meet certain requirements. The transferee must satisfy Bojangles's standards for education, management, and business acumen. They also need to demonstrate good moral character, a solid business reputation, a good credit rating, and the aptitude and financial resources necessary to successfully operate the Bojangles franchise.
Additionally, Bojangles has the discretion to require the transferee to upgrade the restaurant to meet the current system standards and specifications, at the transferee's expense. The transferee's Managing Owner, Designated Operator, and managers must also complete any training and certification programs that Bojangles requires. The original franchisee remains liable for all obligations to Bojangles before the transfer's effective date and must execute any documents to confirm this liability. The franchisee will also pay Bojangles a transfer fee of $5,000 per Restaurant.