If a Bojangles franchisee contests the termination, who operates the restaurant during the dispute, and for whose benefit?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event that this Agreement is terminated and Franchisee contests the validity of the termination, the party that operates the Restaurant during the period commencing with the date that notice of termination was given and ending with the date upon which a final notice and nonappealable judgment resolving the issue is entered, shall operate the Restaurant for the benefit of the prevailing party in such contest, and shall account for, and pay over, any profits earned during said period to the other party, if such other party is the party that prevails.
Source: Item 23 — RECEIPTS (FDD pages 82–573)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, if a franchisee contests the termination of their franchise agreement, the operation of the restaurant during the legal dispute is determined by who ultimately prevails in the contest. The party that operates the Bojangles restaurant from the date the termination notice is given until a final, non-appealable judgment is entered does so for the benefit of the party that wins the dispute.
This means that if Bojangles operates the restaurant during the dispute but the franchisee ultimately wins, Bojangles must account for and pay over any profits earned during that period to the franchisee. Conversely, if the franchisee operates the restaurant and Bojangles prevails, the franchisee must account for and pay the profits to Bojangles.
This arrangement ensures that the economic benefits of the restaurant's operation accrue to the party legally determined to be in the right. It also creates an incentive for both parties to resolve the dispute as quickly as possible, as the profits are not immediately accessible until the legal outcome is decided. A prospective franchisee should consider the potential financial implications of a termination dispute and the responsibility for accounting and transferring profits based on the court's decision.