What is the relationship between the Bojangles's Item 5 development fee and the franchisee's ability to secure financing as described in Item 10?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
velopment Fee
You must pay a development fee of $10,000 for each Restaurant that we authorize you to develop when you sign the Development Agreement regardless of whether you actually develop Restaurants after that time. When you sign the Development Agreement, you also will sign a Franchise Agreement for the first Restaurant that you plan to develop.
The development fee is fully earned and non-refundable in consideration of administrative and other expenses we incur in entering into the Development Agreement and for our lost or deferred opportunity to enter into the Development Agreement with others.
During our previous fiscal year, the development fee paid to us for each Restaurant under applicable development agreements was $10,000 for our standard development.
Franchise Fee
Under the Franchise Agreement, you must pay a franchise fee of $35,000 by the construction commencement deadline of the traditional Restaurant that you agreed to develop according to the development schedule in your Development Agreement. We will credit the development fee that you paid for each Restaurant that you develop under the Development Agreement against the franchise fee that you pay for that Restaurant if you sign the Franchise Agreement and pay the applicable franchise fee by the time you commence construction of the Restaurant.
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, Item 5 details the initial fees, including the development fee, while Item 10 is not provided in the excerpts. The development fee is $10,000 for each restaurant a franchisee is authorized to develop under the Development Agreement. This fee is paid when the Development Agreement is signed, regardless of whether the franchisee actually develops the restaurants. The development fee is considered fully earned and non-refundable by Bojangles due to the administrative and other expenses incurred in entering the Development Agreement, as well as the lost opportunity to contract with others.
The development fee can be credited towards the franchise fee. Specifically, the $10,000 development fee paid for each restaurant under the Development Agreement will be credited against the $35,000 franchise fee due for that restaurant, provided the Franchise Agreement is signed and the franchise fee is paid by the time construction commences. This credit mechanism effectively reduces the initial financial burden on the franchisee when they begin building out their Bojangles location.
Since Item 10 is not included in the provided excerpts, it is not possible to determine how the development fee might specifically impact a franchisee's ability to secure financing. Item 10 typically covers financing options, assistance, or requirements imposed by the franchisor. A prospective franchisee should review Item 10 in the FDD and ask Bojangles about any ways the development fee impacts financing options.