If a Bojangles franchisee becomes insolvent, does the franchise agreement automatically terminate?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
open, and within one (1) year of the final condemnation determination opens, a substitute Restaurant on a new site approved by Franchisor;
- (8) If Franchisee ceases to operate or otherwise abandons, or attempts to cease to operate or abandon, the Restaurant or enters into an agreement to sell, or sells, or purports or attempts to sell, the real property upon which the Restaurant is situated, or substantially all right, title and interest in and to the Restaurant or real property lease, or substantially all of the assets of Franchisee or of the Restaurant, without Franchisor's prior written consent; provided, however, that upon the occurrence of any of the foregoing events, Franchisor may, in lieu of immediate termination of this Agreement, request from Franchisee, a statement of intentions and assurances that no event in breach of this Agreement is so contemplated, which statement and assurances shall be delivered in writing within twenty-four (24) hours of Franchisor's request. 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.
- (9) 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;
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- (10) If Franchisee, after curing a default pursuant to Paragraph XIV.C. hereof, commits the same, or a substantially similar, default again within one hundred eighty (180) days after the prior default occurred, whether or not cured after notice; or
- (11) If Franchisee repeatedly is in default under Paragraph XIV.C. hereof for failure to comply with any of the requirements imposed by this Agreement, whether or not cured after notice.
- C. Except as otherwise provided in Paragraphs XIV.A. and XIV.B. of this Agreement, Franchisee shall have ten (10) days for a monetary default and thirty (30) days for any other default after its receipt from Franchisor of a written notice of default within which to remedy any default hereunder and to provide evidence thereof to Franchisor. If any such default is not cured within that time, or such longer period as applicable law may require, Franchisor may terminate this Agreement, effective immediately upon Franchisee's receipt of notice from Franchisor after the expiration of the ten (10) day or thirty (30) day period, as applicable, or such longer period as applicable law may require. Franchisee shall be in default hereunder for any failure to comply with any of the requirements imposed by this Agreement, including any matter enumerated in this Paragraph XIV.C., as it may from time to time reasonably be supplemented by the Manual, or to carry out the terms of this Agreement in good faith.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, the franchise agreement does not automatically terminate if a franchisee becomes insolvent. However, the agreement can be terminated if the franchisee ceases operations, abandons the restaurant, attempts to sell the real property where the restaurant is located without prior written consent from Bojangles, or sells a substantial portion of the restaurant's assets without consent. In such cases, Bojangles may request a statement of intentions and assurances from the franchisee within 24 hours, along with a performance bond within five business days.
Furthermore, the franchise agreement can be terminated if the franchisee defaults on another Bojangles agreement or development agreement. Termination can also occur if the franchisee commits the same or a substantially similar default within 180 days after curing a previous default, or if the franchisee repeatedly defaults on the agreement requirements.
In the event of a default, Bojangles will provide a written notice, allowing ten days to cure a monetary default and thirty days to cure any other default. If the franchisee fails to remedy the default within the specified time frame, Bojangles has the right to terminate the agreement immediately upon notice. These provisions highlight the importance of maintaining operational and financial stability to avoid potential termination of the Bojangles franchise agreement.
Prospective franchisees should carefully review the conditions under which Bojangles can terminate the franchise agreement to fully understand their obligations and potential risks. Understanding these terms is crucial for ensuring long-term compliance and success as a Bojangles franchisee.