If transferring a Bojangles franchise, must all outstanding obligations to Bojangles be satisfied?
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;
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, if a franchisee seeks to transfer a controlling interest in their restaurant, franchise agreement, or franchise rights, Bojangles has the discretion to set conditions for approval of the transfer. One of these conditions is that "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".
This means that before a transfer can be approved, the franchisee must settle all outstanding debts and financial obligations, not only to Bojangles itself but also to any related entities like parent companies, subsidiaries, or affiliates. This requirement protects Bojangles's financial interests and ensures that the new franchisee is not burdened with the previous owner's debts.
Additionally, the transferring franchisee must not be in default of any provision of the Franchise Agreement or any other agreements with Bojangles or its affiliates. The transferor must also execute a general release, absolving Bojangles from any claims. The transferee must also enter into a written agreement assuming all of the franchisee's obligations under the Franchise Agreement. These stipulations ensure a clean break and continued adherence to the franchise terms under new ownership.