Regarding Bojangles' franchise system, what is the criteria for pending actions, other than routine litigation, to be considered significant enough to warrant disclosure in Item 22?

According to Bojangles' 2025 Franchise Disclosure Document, Item 22 addresses contracts and outlines the criteria for disclosing pending actions against the franchisor, its predecessors, individuals identified in Item 2, or affiliates offering franchises under Bojangles' principal trademark. Specifically, it states that pending actions, excluding routine litigation incidental to the business, must be disclosed if they are considered significant. Significance is determined by considering the number of franchisees and the size, nature, or financial condition of the Bojangles franchise system or its business operations. This means that not all legal actions need to be disclosed, only those that could potentially impact the franchisees or the overall financial health and stability of the Bojangles franchise.

For a prospective Bojangles franchisee, this disclosure requirement offers a degree of protection. It ensures that Bojangles must reveal any ongoing legal issues that could materially affect the franchise system. By evaluating the number of franchisees and the size, nature, and financial condition of the franchise system, prospective franchisees can assess whether the pending actions could pose a risk to their investment.

It is important to note that the FDD excerpt does not provide specific metrics or thresholds for determining significance. Instead, it relies on a qualitative assessment of the potential impact of the pending actions. Therefore, a prospective franchisee should carefully review Item 22 and any related disclosures to understand the nature and potential implications of any pending actions. If there are any concerns, it would be prudent to seek legal counsel to evaluate the risks involved before investing in a Bojangles franchise.