How does the Bojangles's Item 6 interest fee relate to the initial investment costs in Item 7?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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. |
| Interest | 1.5% per month compounded monthly or the maximum rate permitted by law, whichever is less | Payable upon demand. | Payable on any overdue amount or underpayment from the date such amount was due until paid. |
| Transfer | $5,000 per Restaurant | Payable prior to consummation of transfer. | We have the right to approve all transfers. Payable only if a transfer, alone or together with other previous, simultaneous, or proposed transfers, would have the effect of transferring a controlling interest in you, the Restaurant or in any Development or Franchise Agreement. |
| Renewal | 50% of franchise fee in effect at time of renewal | Payable upon signing of Renewal Franchise Agreement prior to end of then- current term. | The Bojangles Express Franchise Agreement does not provide for renewal rights. |
| New Product and Supplier Testing | Our reasonable expenses (estimated at $4,800 - $12,900) | Payable upon demand. | If you request our authorization to sell new products or use an alternate supplier of products or services, you must pay our reasonable expenses to evaluate the supplier. See Item 8. |
| Training – Optional Programs | Then-current training fee | Payable upon demand. | Payable for optional training programs and seminars we may offer from time to time. |
| On-site support | $2,500 per person per week | Payable upon demand. | If you request additional on-site personnel support for a Restaurant opening or at any time thereafter, we will charge you $2,500 per person per week. |
| Costs and Attorneys’ Fees | Our costs and expenses | As incurred | If we prevail in litigation regarding enforcement of the terms of any agreement, you must pay our attorneys’ fees and costs. |
| Reimbursement of Insurance Costs | Cost of procuring insurance and our expenses | Upon demand | Payable if you fail to procure or maintain required insurance and we procure such insurance. |
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, Item 6 outlines various fees a franchisee might incur, including an interest fee. This interest fee, set at 1.5% per month compounded monthly or the maximum rate permitted by law (whichever is less), is applied to any overdue amount or underpayment from the date the amount was due until it is paid. This has a direct relationship to the initial investment costs detailed in Item 7 because if a franchisee fails to pay any of the initial investment costs on time, they will be subject to this interest fee.
Item 7 details the estimated initial investment required to open a Bojangles restaurant. These costs include franchise fees, insurance, pre-opening salaries and expenses, site selection costs, building costs, equipment, soft costs, initial inventory, utility deposits, business licenses, and additional funds for the initial phase. If any of these costs are not paid on time, the interest fee from Item 6 will be applied to the outstanding balance, increasing the overall initial investment. For example, if a franchisee is late paying for equipment, which Item 7 notes must be paid in full for the first restaurant, they will incur interest charges on the unpaid amount.
Therefore, while the interest fee itself is not included in the initial investment estimates in Item 7, it can significantly impact the total cost if payments are not made promptly. A prospective Bojangles franchisee should ensure they have sufficient capital to cover all initial investment costs and maintain timely payments to avoid incurring these additional interest charges. Careful financial planning and adherence to payment schedules are crucial to managing the overall cost of opening a Bojangles restaurant.