During the term of the Bojangles agreement, can a developer or their shareholders own a restaurant that sells fried chicken and is located within ten miles of a Bojangles restaurant?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer covenants that:
(1) During the term of this Agreement, except as otherwise approved in writing by Franchisor, Developer and its shareholders or members shall not, either directly or indirectly, for themselves, or through, on behalf of, or in conjunction with any person, persons, partnership, corporation or limited liability company:
(b) Own, maintain, advise, help, invest in, make loans to, be employed by, be the landlord of, engage in, or have any interest in:
(i) Any restaurant business which: (a) competes with any Bojangles restaurant or which sells fried chicken, biscuits and/or biscuit sandwiches, or other items which are featured menu items at Bojangles restaurants; and (b) is located within the Assigned Area or within ten (10) miles from any Bojangles restaurant that is open, planned for construction or under construction; or
(ii) Any fast food restaurant business which is located (a) within the Assigned Area; or (b) within ten (10) miles from the site of any Restaurant developed hereunder or any Bojangles restaurant that is open, planned for construction, or under construction.
Paragraph X.A. shall not apply to ownership by Developer of less than two percent (2%) beneficial interest in the outstanding equity securities of any corporation which is registered under the Securities Exchange Act of 1934.
Source: Item 23 — RECEIPTS (FDD pages 82–573)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, during the term of the agreement, a developer and their shareholders are restricted from owning or having an interest in certain restaurant businesses. Specifically, they cannot own, maintain, advise, help, invest in, make loans to, be employed by, be the landlord of, engage in, or have any interest in a restaurant business that competes with Bojangles or sells fried chicken, biscuits, and/or biscuit sandwiches, or other featured menu items. This restriction applies if the competing restaurant is located within the assigned area or within ten miles of any Bojangles restaurant that is open, planned for construction, or under construction.
Additionally, developers and their shareholders are prohibited from having an interest in any fast food restaurant business located within the assigned area or within ten miles of a Bojangles restaurant that is open, planned for construction, or under construction. These covenants are in place to protect Bojangles's market share and goodwill by preventing developers from directly competing with the franchise during the term of their agreement.
These restrictions do not apply to ownership of less than two percent beneficial interest in the outstanding equity securities of any corporation registered under the Securities Exchange Act of 1934. This exception allows developers to hold minor investments in publicly traded companies that may operate competing restaurants without violating the agreement. It is important for prospective developers to understand these restrictions and ensure compliance to avoid potential breaches of the agreement.