If a Bojangles franchisee fails to meet the local advertising expenditure requirement, what options does the franchisor have regarding the funds paid by the franchisee?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor may then in its sole discretion contribute such amounts to any franchisee cooperative organization that operates in part or all of Franchisee's market area or Franchisor may expend such funds to create advertising that in Franchisor's sole determination will promote the Proprietary Marks and/or System in Franchisee's market area.
- D.
Franchisor may offer from time to time to provide, upon Franchisee's request and at Franchisee's expense, approved local advertising and promotional plans and materials.
- E.
Franchisee agrees to make contributions to the Bojangles Marketing Development Fund (hereinafter "Fund") as required under Paragraph IV.C. hereof.
The Fund shall be maintained and administered by Franchisor or its designee, as follows:
- (1) Franchisor shall direct the creation of all advertising programs, with sole discretion over the creative concepts, materials, and media used in such programs.
Franchisee agrees and acknowledges that the Fund is intended to maximize general public recognition and acceptance of the trade names, trademarks, and service marks which are designated as part of the System for the benefit of the System through research and the creation of marketing materials; and that Franchisor and its designee undertake no obligation, in administering the Fund, to make expenditures which are equivalent or proportionate to a franchisee's contribution, or to insure that any particular franchisee benefits directly or pro rata from Fund expenditures.
Franchisee is aware that there may be some franchisees operating under different forms of agreement and who may not be required to make payments into the Fund equivalent to Franchisee's payments.
- (2) Franchisor shall, for each of its company-owned Bojangles restaurants, make contributions to the Fund equivalent to the contributions required of comparable franchised Bojangles restaurants within the Bojangles System so that Franchisor's average contribution for each company-owned Restaurant will be equal to the average contribution per franchise-owned Restaurant.
This average per Restaurant contribution for franchise-owned Restaurants will be calculated by dividing the total contributions of franchisees to the Fund by the total number of franchise-owned Restaurants.
Franchisor's total contribution to the Fund will equal this average
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, franchisees are required to spend at least 3% of their restaurant's gross sales on local and regional media advertising, in addition to any advertising contributions required for the Bojangles Marketing Development Fund. Franchisees must demonstrate these expenditures to Bojangles's satisfaction on a quarterly basis. If a franchisee fails to meet this local advertising expenditure requirement, Bojangles has the discretion to manage the funds in specific ways.
Specifically, Bojangles may contribute the funds to a franchisee cooperative organization operating in the franchisee's market area. Alternatively, Bojangles can use the funds to create advertising that it believes will promote the Bojangles brand and system within the franchisee's market area. This provides Bojangles with flexibility in how advertising funds are utilized, especially if a franchisee does not fulfill their local advertising obligations.
This arrangement means that a Bojangles franchisee's failure to meet the advertising expenditure requirement does not necessarily result in a penalty or loss of funds. Instead, Bojangles retains control over how those funds are spent to support advertising and promotion in the franchisee's market. It is important for prospective franchisees to understand that Bojangles has the final say in how these funds are used to benefit the overall system and brand recognition in the specific market.