How does the Bojangles's Item 6 interest fee relate to the utility deposits and business licenses in Item 9?
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. |
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, Item 6 outlines various fees a franchisee may incur, including an interest fee, while Item 9 details the franchisee's obligations, such as utility deposits and business licenses. The interest fee in Item 6 is specifically related to overdue payments or underpayments owed to Bojangles. This means that if a franchisee fails to make timely payments for any amounts due, including royalties, advertising contributions, or other fees, they will be subject to an interest charge of 1.5% per month compounded monthly, or the maximum rate permitted by law, whichever is less. This interest applies from the date the amount was originally due until it is paid in full.
Item 9 states that franchisees are generally required to submit deposits for utilities, the amount of which varies depending on the utility companies' practices. These deposits are typically refundable under the utility company's terms. Additionally, the locality in which the Bojangles restaurant is located may require a business license, which involves paying a fee. There may also be impact fees or other similar development fees charged by the municipal authority or utility company.
While the interest fee in Item 6 does not directly apply to the initial deposits and license fees described in Item 9, it does apply to any overdue payments related to ongoing fees. For example, if a franchisee fails to pay their monthly royalty or advertising fees on time, the interest fee would be applied to those overdue amounts. However, the interest fee would not apply to the initial utility deposits or business license fees themselves, as these are paid to third-party utility companies and local governments, not directly to Bojangles.
In summary, the interest fee outlined in Item 6 serves as a penalty for late payments to Bojangles, while Item 9 describes the franchisee's obligations to secure necessary utilities and licenses for their restaurant. Franchisees should ensure they understand all payment terms and deadlines to avoid incurring interest charges on overdue amounts.