If a Bojangles franchisee becomes insolvent, what happens to their franchise agreement?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
As an inducement to BOJANGLES OPCO, LLC ("Franchisor") to execute the Individual Franchise Agreement ("Agreement"), to which this Guarantee is attached, the undersigned, jointly and severally, hereby agree to be individually bound by all the terms and conditions of the Agreement including any amendments thereto whenever made and unconditionally guarantee to Franchisor and its successors and assigns the payment of all liabilities incurred by Franchisee at any time.
Sixty (60) days after any default of Franchisee under Paragraphs XV.A. or XV.B. of the Agreement, or ninety (90) days after a default by Franchisee which is not cured under Paragraph XV.C. of the Agreement, the undersigned will immediately make payment of any liabilities previously incurred by Franchisee. Without affecting the obligations of the undersigned under this Guarantee, Franchisor may, without notice to the undersigned, extend, modify, or release any indebtedness or obligation of Franchisee, or settle, adjust, or compromise any claims against Franchisee. The undersigned waive notice of amendment of the Agreement and notice of demand for payment and performance by Franchisee.
Upon death of an individual guarantor, the estate of such guarantor will be bound by this Guarantee but only for defaults and obligations hereunder existing at the time of death, and the obligations of the other guarantors will continue in full force and effect.
Paragraph XXV (Applicable Law) of the Agreement is incorporated by reference into this Guarantee.
IN WITNESS WHEREOF, each of the undersigned has signed this Guarantee as of the Effective Date of the Agreement.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
I am unable to provide information about what happens to the Bojangles franchise agreement if a franchisee becomes insolvent, based on the excerpts from the 2025 Franchise Disclosure Document. The provided documents do contain the franchise agreement and discuss terminations, but do not specifically address insolvency. For example, the FDD includes a guarantee that is attached to the franchise agreement, where the guarantor agrees to be individually bound by all the terms and conditions of the agreement.
To fully understand the implications of franchisee insolvency, prospective franchisees should carefully review the franchise agreement, paying close attention to the sections on termination, default, and transfer of ownership. It would be prudent to consult with a legal and financial advisor to assess the risks associated with insolvency and how it could impact the franchise agreement.
Specifically, a prospective Bojangles franchisee should ask the franchisor about the procedures and consequences related to insolvency, including whether the franchisor has the right to terminate the agreement, take over the operations, or transfer the franchise to another party. Understanding these details is crucial for making an informed decision about investing in a Bojangles franchise.