Does the non-compete clause for Bojangles extend to shareholders or members of the developer entity?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer acknowledges that, pursuant to this Agreement, Developer will receive valuable specialized training and confidential information, including, without limitation, information relating to the operational, sales, promotional, and marketing methods and techniques of Franchisor and the System.
In addition, Developer acknowledges its obligation to develop Restaurants hereunder.
Accordingly, Developer covenants that:
(1) During the term of this Agreement, except as otherwise approved in writing by Franchisor, Developer and its shareholders or members shall not, either directly or indirectly, for themselves, or through, on behalf of, or in conjunction with any person, persons, partnership, corporation or limited liability company:
(b) Own, maintain, advise, help, invest in, make loans to, be employed by, be the landlord of, engage in, or have any interest in:
(i) Any restaurant business which: (a) competes with any Bojangles restaurant or which sells fried chicken, biscuits and/or biscuit sandwiches, or other items which are featured menu items at Bojangles restaurants; and (b) is located within the Assigned Area or within ten (10) miles from any Bojangles restaurant that is open, planned for construction or under construction; or
(2) During the continuing uninterrupted period commencing upon the expiration or termination of this Agreement, regardless of the cause for termination, and continuing for two (2) years thereafter, except as otherwise approved in writing by Franchisor, Developer and its shareholders or members shall not, either directly or indirectly, for themselves, or through, on behalf of, or in conjunction with any person, persons, partnership, corporation, or limited liability company, own, maintain, advise, help, invest in, make loans to, be employed by, be the landlord of, engage in, or have any interest in:
Paragraph X.A. shall not apply to ownership by Developer of less than two percent (2%) beneficial interest in the outstanding equity securities of any corporation which is registered under the Securities Exchange Act of 1934.
Source: Item 23 — RECEIPTS (FDD pages 82–573)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, the non-compete clause does extend to shareholders or members of the developer entity. During the term of the Development Agreement, the developer and its shareholders or members are restricted from engaging in or having any interest in competing restaurant businesses, unless otherwise approved in writing by Bojangles. This includes businesses that compete with Bojangles or sell similar menu items like fried chicken and biscuits within the assigned area or within ten miles of any Bojangles restaurant.
Additionally, for a period of two years after the expiration or termination of the Development Agreement, the developer and its shareholders or members are prohibited from owning, maintaining, advising, or being involved with any competing restaurant business. This restriction applies within ten miles of any Bojangles restaurant developed under the agreement or within a designated market area where the assigned area is located.
However, this non-compete clause does not apply if the developer owns less than two percent beneficial interest in the equity securities of a corporation registered under the Securities Exchange Act of 1934. This exception allows for minor investments in publicly traded companies that may have some connection to the restaurant industry without violating the non-compete agreement.