What is the royalty fee due for a Bojangles restaurant in its second year following the opening date?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
| Year Following Opening Date of the Restaurant | Applicable Royalty Fee Reduction (to be subtracted from the standard royalty fee) | Applicable Royalty Fee Due |
|---|---|---|
| Year One | 3% of Gross Sales | 1% of Gross Sales |
| Year Two | 2% of Gross Sales | 2% of Gross Sales |
| Year Three | 1% of Gross Sales | 3% of Gross Sales |
| Year Four and onward | No reduction | 4% of Gross Sales |
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles' 2025 Franchise Disclosure Document, the royalty fee for a Bojangles restaurant in its second year following the opening date is 2% of gross sales. This reduced royalty fee is part of a development incentive program.
Bojangles' standard royalty fee is 4% of gross sales. However, for the first three years of operation, franchisees participating in the development incentive program benefit from a reduced royalty fee. In the first year, the royalty fee is reduced to 1% of gross sales, increasing to 2% in the second year, and 3% in the third year. By the fourth year, the royalty fee reverts to the standard 4%.
This royalty fee reduction can significantly lower the initial operating costs for a new Bojangles franchise, providing financial relief during the critical early stages of the business. Franchisees should note that this incentive is tied to compliance with the Development Agreement and other agreements with Bojangles, and failure to comply can result in the termination of the royalty fee reduction.
It is important to note that the specific terms and conditions of the development incentive program are detailed in Exhibit A of the Franchise Agreement. Prospective franchisees should carefully review this exhibit to fully understand the eligibility requirements, benefits, and potential consequences of non-compliance.