What royalty fee reduction, if any, applies to a Bojangles restaurant in its third year of operation?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
ing schedule:
| Year Following Opening Date of Qualifying Restaurant | Applicable Royalty Fee Reduction (to be subtracted from the standard royalty fee) | |
|---|---|---|
| Year One | 3% of Gross Sales of the Restaurant | |
| Year Two | 2% of Gross Sales of the Restaurant | |
| Year Three | 1% of Gross Sales of the Restaurant | |
| Year Four and Onward | Standard royalty fee rate set forth in the Franchise Agreement | The following definitions apply to this program: |
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles' 2025 Franchise Disclosure Document, a royalty fee reduction applies to a Bojangles restaurant in its third year of operation. Specifically, during the third year following the opening date of a qualifying restaurant, the royalty fee is reduced by 1% of gross sales. This means the franchisee will pay a royalty fee that is 1% less than the standard royalty fee outlined in the Franchise Agreement.
For example, if the standard royalty fee is 4% of gross sales, the franchisee would only pay 3% of gross sales as a royalty fee during the restaurant's third year of operation. This reduction can provide a financial benefit to the franchisee during that year, potentially improving profitability and cash flow.
It's important to note that this royalty fee reduction is part of a broader development incentive program, and specific conditions may apply to qualify for this reduction. Franchisees should carefully review the terms and conditions of the Development Incentive Program Addendum to ensure they meet all requirements and maintain eligibility for the reduced royalty fee.