How does the Bojangles's Item 5 development fee relate to the territory granted in Item 12?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
If we sign a Development Agreement with you, we will grant you a territory in which you are allowed to develop Restaurants. The territory is referred to as an Assigned Area in the Development Agreement. The Assigned Area will be described by street boundaries or political subdivisions or may designate certain locations, intersections or market areas. The Assigned Area will be negotiated individually with you. The Assigned Area and the individual franchise locations will be based upon relevant factors including population, traffic patterns, trade areas and proximity to business generators such as schools and hospitals, and your ability to develop the Assigned Area in a timely manner. You must always obtain our approval for each specific Restaurant location within the Assigned Area. If we approve the location, a franchise is granted for that specific location only and we will sign a Franchise Agreement with you for that location. You do not receive any territorial rights under the Franchise Agreement.
Since we retain certain rights mentioned below within your Assigned Area, you will not receive an exclusive territory; you may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Your right to develop Restaurants in the Assigned Area will be for a limited time and be subject to your compliance with the terms of your Development Agreement and our retained rights. After the expiration or early termination of the Development Agreement you will no longer have rights to develop in the Assigned Area. You do not have the right to open and operate any Restaurants in excess of the number of Restaurants specified in the Development Agreement. The Development Agreement does not grant options, rights of first refus
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, the development fee paid under the Development Agreement is tied to the territory granted. Item 12 states that Bojangles grants a territory, referred to as an Assigned Area, in which the franchisee is allowed to develop restaurants. Item 5 details that a development fee of $10,000 is required for each restaurant Bojangles authorizes the franchisee to develop when signing the Development Agreement, regardless of whether the franchisee actually develops the restaurants.
The Assigned Area is described by street boundaries, political subdivisions, or may designate certain locations, intersections, or market areas, and is negotiated individually with each franchisee. Bojangles must approve each specific restaurant location within the Assigned Area. Upon approval, a franchise is granted for that specific location only, and a Franchise Agreement is signed.
The development fee paid for each restaurant under the Development Agreement can be credited against the franchise fee for that restaurant if the franchisee signs the Franchise Agreement and pays the applicable franchise fee by the time construction commences. This means that while the development fee is initially non-refundable, it effectively reduces the initial franchise fee due when the restaurant project proceeds as planned. However, the franchisee's right to develop restaurants in the Assigned Area is for a limited time and subject to compliance with the Development Agreement, and Bojangles retains certain rights within the Assigned Area, meaning the territory is not exclusive.