How does the Bojangles's Item 5 development fee relate to the franchisee's obligations under the Development Agreement described in Item 12?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
velopment Fee
You must pay a development fee of $10,000 for each Restaurant that we authorize you to develop when you sign the Development Agreement regardless of whether you actually develop Restaurants after that time. When you sign the Development Agreement, you also will sign a Franchise Agreement for the first Restaurant that you plan to develop.
The development fee is fully earned and non-refundable in consideration of administrative and other expenses we incur in entering into the Development Agreement and for our lost or deferred opportunity to enter into the Development Agreement with others.
During our previous fiscal year, the development fee paid to us for each Restaurant under applicable development agreements was $10,000 for our standard development.
Franchise Fee
Under the Franchise Agreement, you must pay a franchise fee of $35,000 by the construction commencement deadline of the traditional Restaurant that you agreed to develop according to the development schedule in your Development Agreement. We will credit the development fee that you paid for each Restaurant that you develop under the Development Agreement against the franchise fee that you pay for that Restaurant if you sign the Franchise Agreement and pay the applicable franchise fee by the time you commence construction of the Restaurant.
The franchise fee for each Individual Franchise Agreement is $35,000 and is payable upon execution of the Individual Franchise Agreement.
You must pay a franchise fee of $20,000 when you sign the Bojangles Express Franchise Agreement for a Bojangles Express Restaurant.
All franchise fees are fully earned and non-refundable when paid.
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, a franchisee must pay a development fee of $10,000 for each restaurant they are authorized to develop under the Development Agreement. This fee is paid when the Development Agreement is signed, regardless of whether the franchisee actually develops the restaurants. The development fee is considered fully earned and non-refundable by Bojangles due to the administrative and other expenses they incur in entering the Development Agreement, as well as the lost opportunity to contract with others.
The Development Agreement also requires the franchisee to sign a Franchise Agreement for the first restaurant they plan to develop. Under the Franchise Agreement, a franchise fee of $35,000 is due by the construction commencement deadline for a traditional restaurant. However, Bojangles will credit the $10,000 development fee paid for each restaurant against this franchise fee, provided the Franchise Agreement is signed and the franchise fee is paid by the time construction commences.
In summary, the development fee serves as a commitment to develop restaurants under the Development Agreement, and it is later credited towards the franchise fee when the franchisee proceeds with the development of each restaurant. This arrangement incentivizes franchisees to follow through with their development plans while compensating Bojangles for their initial investment in establishing the Development Agreement. For Bojangles Express Restaurants, a franchise fee of $20,000 is required when signing the Bojangles Express Franchise Agreement.