What is the purpose of the restricted cash held by the trustee for Bojangles?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
The Indenture required that the Securitization Entities report and remit weekly cash flows of the Securitization Entities to the trustee of the 2020-1 Senior Notes. The weekly cash flows were subject to priorities of payment that provided for the payment of funds to specific reserve accounts for debt service and other specified purposes set forth in the Indenture. The Amended Indenture also requires that the Securitization Entities report and remit weekly cash flows of the Securitization Entities to the trustee of the 2024-1 Senior Notes. The weekly cash flows are subject to priorities of payment that provide for the payment of funds to specific reserve accounts for debt service and other specified purposes set forth in the Amended Indenture. The amount of weekly cash flow, if any, that exceeds the amounts required by the priorities of payment is generally remitted to BRI in the form of an equity distribution.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, the trustee holds restricted cash to manage debt service and other specified obligations related to the 2024-1 Senior Notes. The Securitization Entities, which include Bojangles Opco, LLC, report and remit their weekly cash flows to the trustee. These cash flows are then subject to a priority of payments, where funds are allocated to specific reserve accounts. These accounts are designated for debt service and other purposes outlined in the Amended Indenture.
This arrangement ensures that Bojangles's debt obligations are met in a timely manner. The indenture requires the Securitization Entities to report and remit weekly cash flows to the trustee. The trustee then allocates funds to specific reserve accounts based on a predetermined priority of payments. This structure provides a level of security for the noteholders, as it ensures that funds are available to cover debt service and other obligations.
For a prospective Bojangles franchisee, this indicates that a portion of the revenue generated by the Bojangles restaurants is earmarked for debt obligations and other specified purposes. The amount of weekly cash flow that remains after these obligations are met is then remitted to BRI in the form of an equity distribution. This structure is part of the financial framework that supports Bojangles's operations and growth.