How does the Bojangles's Item 6 audit fee relate to the trademarks described in Item 13?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 6: OTHER FEES]
| Type of Fee1 | Amount | Due Date | Comments |
|---|---|---|---|
| Audit | Deficiencies in amounts owed, plus interest | Payable upon invoice. | You also must pay all costs and expenses connected with the audit if an audit reveals an understatement of 5% or more. |
[Item 13: TRADEMARKS]
ITEM 13 TRADEMARKS
Franchise Agreement
We are the owner of all right, title and interest in and to the Proprietary Marks. The Franchise Agreement grants you the right to use the Proprietary Marks designated by us only in a manner authorized and permitted by us and only for the operation of your Restaurant at the location authorized in the Franchise Agreement or in advertising for the Restaurant. Under the terms of the Franchise Agreement, you must not use the Proprietary Marks as part of your corporate or other legal name.
Under the Franchise Agreement, you receive a license to use the following principal trademarks and service marks that we have registered on the Principal Register of the United States Patent and Trademark Office ("USPTO"). All required affidavits of continued use have been filed and accepted.
WHEREAS, Franchisor identifies the Bojangles System by means of certain trade names, service marks, trademarks, logos, emblems and indicia of origin, including but not limited to the marks "BOJANGLES®", "BOJANGLES'®" and "BOJANGLES' FAMOUS CHICKEN 'N BISCUITS ®", and such other trade names, service marks, and trademarks as are now designated (and may hereafter be designated by Franchisor in writing) for use in connection with the Bojangles System ("Proprietary Marks") and certain unique trade dress, including but not limited to specific color schemes, patterns, designs, decor, furnishings and layout, now or hereafter used by Franchisor in connection with the Bojangles System (hereinafter referred to as "Trade Dress");
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, Item 6 outlines the fees a franchisee may incur, including an audit fee, while Item 13 describes the trademarks that Bojangles owns and licenses to franchisees. The audit fee in Item 6 is triggered if an audit reveals that a franchisee has understated their payments to Bojangles by 5% or more. This audit process is a mechanism that Bojangles uses to ensure accurate reporting of revenues, which are often tied to royalty payments that support the use and protection of the Bojangles trademarks.
The trademarks, as detailed in Item 13, are crucial for maintaining brand consistency and recognition, and Bojangles grants franchisees the right to use these marks under specific conditions. The audit fee serves as a deterrent against underreporting, which could impact the royalties that Bojangles collects and uses to manage and protect its trademarks. These trademarks include names like "BOJANGLES®", "BOJANGLES'®" and "BOJANGLES' FAMOUS CHICKEN 'N BISCUITS ®".
In essence, the audit fee in Item 6 is indirectly related to the trademarks in Item 13 because it helps ensure that Bojangles receives the appropriate royalties, which are essential for maintaining the value and integrity of its brand and trademarks. Franchisees must adhere to the terms of the Franchise Agreement regarding the use of the Proprietary Marks and accurate financial reporting to avoid triggering an audit and associated fees.