If a transfer would result in a change of controlling interest in the Bojangles restaurant, what options does Bojangles have?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
each of this Agreement, for which Franchisor may then terminate without opportunity to cure pursuant to Paragraph XIV.B. of this Agreement.
- (3) If a transfer, alone or together with other previous, simultaneous, or proposed transfers, would have the effect of transferring a controlling interest in the Restaurant, interest in this Agreement, or in the franchise rights or license rights granted hereunder, or in Franchisee, Franchisor may, in its sole discretion, if it does not elect to exercise its option to purchase set forth in Paragraph XIII.C. herein, require any or all of the following as conditions of its approval:
- (a) All of Franchisee's accrued and outstanding monetary obligations to third parties and all accrued and outstanding obligations to Franchisor, or any parent, subsidiary or affiliate of Franchisor shall have been satisfied;
- (b) Franchisee shall not be in default of any provision of this Agreement, any amendment hereto or successor hereof, or any other agreement between Franchisee and Franchisor, its parents, subsidiaries, or affiliates;
- (c) The transferor shall have executed a general release under seal, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders, and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state, and local laws, rules, and ordinances; and shall agree to remain liable to Franchisor for all affirmative obligations, covenants, and agreements contained herein for two (2) years following the effective date of transfer (or, if transferor retains a purchase money interest in the transferred business, for a period greater than two (2) years, until the interest is extinguished) or for such shorter period as Franchisor may, in its sole discretion, determine;
- (d) The transferee shall enter into a written assignment, under seal and in a form satisfactory to Franchisor, assuming and agreeing to discharge all of Franchisee's
obligations under this Agreement; and, if the obligations of Franchisee were guaranteed by the transferor, the transferee shall guarantee the performance of all such obligations in writing in a form satisfactory to Franchisor;
- (e) The transferee shall demonstrate to Franchisor's satisfaction that the transferee meets Franchisor's educational, managerial, and business standards; possesses a good moral character, business reputation, and credit rating; has the aptitude and ability to conduct the Franchised Business herein (as may be evidenced by prior related business experience or otherwise); and has adequate financial resources and capital to operate the Franchised Business;
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, if a transfer of interest would result in a change of controlling interest in the restaurant, Bojangles has options regarding the transfer. Bojangles may choose not to exercise its option to purchase the interest. If Bojangles does not exercise its option to purchase, it may require certain conditions to be met as part of the approval process.
These conditions include ensuring that all of the franchisee's outstanding monetary obligations to third parties and Bojangles (or its affiliates) are satisfied. The franchisee must not be in default of any agreement with Bojangles or its affiliates. The transferor must execute a general release of claims against Bojangles and its related parties, agreeing to remain liable for obligations for two years after the transfer, or longer if they retain a purchase money interest. The transferee must also enter into a written agreement assuming all of the franchisee's obligations, and guarantee those obligations if they were previously guaranteed by the transferor.
Bojangles also has the option to purchase any interest in the restaurant or the franchise agreement. If a franchisee receives a legitimate offer from a third party to purchase their interest, and that transfer would result in a change of controlling interest, the franchisee must provide Bojangles with the terms of the proposed transfer in writing at least 60 days before the transfer date. Bojangles then has 30 days to decide if it will exercise its option to purchase the interest on the same terms offered by the third party, minus any finder's or broker's fees. If Bojangles decides to purchase the interest, the closing must occur within 30 days of their notice to the seller.
If Bojangles does not exercise its option to purchase, the franchisee may proceed with the transfer to the third party, provided they have met all the conditions outlined in the agreement. However, any significant change to the terms of the third party's offer before closing constitutes a new offer, which is again subject to Bojangles's option to purchase. Bojangles's failure to exercise its purchase option does not waive any other provisions of the agreement related to the proposed transfer.