For how long does a transferring Bojangles franchisee remain liable to the franchisor after the transfer?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) The transferor shall have executed a general release under seal, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders, and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state, and local laws, rules, and ordinances; and shall agree to remain liable to Franchisor for all affirmative obligations, covenants, and agreements contained herein for two (2) years following the effective date of transfer (or, if transferor retains a purchase money interest in the transferred business, for a period greater than two (2) years, until the interest is extinguished) or for such shorter period as Franchisor may, in its sole discretion, determine;
Source: Item 23 — RECEIPTS (FDD pages 82–573)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, a transferring franchisee remains liable to Bojangles for a specific duration after the transfer. If a transfer results in a change of controlling interest, the transferring franchisee must agree to remain liable to Bojangles for all obligations, covenants, and agreements within the franchise agreement for two years following the transfer's effective date.
However, there is an exception to this two-year period. If the transferring franchisee retains a purchase money interest in the transferred business, their liability extends beyond two years, lasting until that interest is extinguished. Bojangles also retains the discretion to shorten this liability period if they choose.
This condition ensures that Bojangles has recourse against the original franchisee for a reasonable period, especially concerning obligations that arose during their tenure. It also provides an incentive for the transferring franchisee to ensure a smooth transition and that the new franchisee is set up for success. The clause regarding purchase money interest protects Bojangles in cases where the original franchisee continues to have a financial stake in the business's performance after the transfer.