How does the Bojangles's Item 6 interest fee relate to the territory granted in Item 12?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
M 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. | | 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. |
| 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. |
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, the interest fee outlined in Item 6 is not directly related to the territory granted in Item 12. Item 6 specifies that an interest fee of 1.5% per month, compounded monthly (or the maximum rate permitted by law, whichever is less), is payable on any overdue amount or underpayment from the date such amount was due until paid. This interest applies to any overdue payments owed to Bojangles, regardless of the franchisee's territory.
Item 12 describes the territory granted to a franchisee. If a franchisee signs a Franchise Agreement, they receive the right to establish one restaurant at a specific location but do not receive any protected territory around that location. Bojangles does not restrict other franchisees or itself from soliciting sales inside a franchisee's assigned area. However, Bojangles retains the right to modify or terminate the territorial rights if the franchisee defaults, including failing to meet the development schedule.
In summary, the interest fee is a financial penalty for late payments and is separate from the stipulations regarding the territory granted to a Bojangles franchisee. The interest fee applies universally to all franchisees who have overdue payments, while the territorial rights define where a franchisee can operate and are subject to certain conditions and potential modifications based on the franchisee's compliance with the franchise agreement.