What outstanding obligations must be satisfied before a Bojangles franchisee can transfer their interest?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
each of this Agreement, for which Franchisor may then terminate without opportunity to cure pursuant to Paragraph XIV.B. of this Agreement.
- (3) If a transfer, alone or together with other previous, simultaneous, or proposed transfers, would have the effect of transferring a controlling interest in the Restaurant, interest in this Agreement, or in the franchise rights or license rights granted hereunder, or in Franchisee, Franchisor may, in its sole discretion, if it does not elect to exercise its option to purchase set forth in Paragraph XIII.C. herein, require any or all of the following as conditions of its approval:
- (a) All of Franchisee's accrued and outstanding monetary obligations to third parties and all accrued and outstanding obligations to Franchisor, or any parent, subsidiary or affiliate of Franchisor shall have been satisfied;
- (b) Franchisee shall not be in default of any provision of this Agreement, any amendment hereto or successor hereof, or any other agreement between Franchisee and Franchisor, its parents, subsidiaries, or affiliates;
- (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;
- (d) The transferee shall enter into a written assignment, under seal and in a form satisfactory to Franchisor, assuming and agreeing to discharge all of Franchisee's
obligations under this Agreement; and, if the obligations of Franchisee were guaranteed by the transferor, the transferee shall guarantee the performance of all such obligations in writing in a form satisfactory to Franchisor;
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, a franchisee looking to transfer their interest, particularly a controlling interest, must meet specific conditions to gain approval from Bojangles. These conditions ensure that the transfer does not negatively impact the brand or other franchisees.
First, all accrued and outstanding monetary obligations to third parties, as well as any outstanding obligations to Bojangles, its parent company, subsidiaries, or affiliates, must be satisfied. Additionally, the franchisee must not be in default of any provision of the Franchise Agreement, any amendments to it, or any other agreements with Bojangles or its affiliates. The transferor is also required to execute a general release under seal, in a form satisfactory to Bojangles, releasing any claims against Bojangles and its related parties. The transferor remains liable for all affirmative obligations for a period of two years after the transfer, or longer if they retain a purchase money interest in the business.
Furthermore, the transferee must enter into a written assignment, under seal and satisfactory to Bojangles, agreeing to fulfill all of the franchisee's obligations under the Franchise Agreement. If the transferor had guaranteed the franchisee's obligations, the transferee must also provide a written guarantee in a form acceptable to Bojangles. These conditions collectively aim to protect Bojangles's interests and ensure a smooth transition of the franchise to a capable and financially responsible party.