Can Bojangles terminate the franchise agreement if a franchisee transfers their interest without consent?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
- (8) If Franchisee ceases to operate or otherwise abandons, or attempts to cease to operate or abandon, the Restaurant or enters into an agreement to sell, or sells, or purports or attempts to sell, the real property upon which the Restaurant is situated, or substantially all right, title and interest in and to the Restaurant or real property lease, or substantially all of the assets of Franchisee or of the Restaurant, without Franchisor's prior written consent; provided, however, that upon the occurrence of any of the foregoing events, Franchisor may, in lieu of immediate termination of this Agreement, request from Franchisee, a statement of intentions and assurances that no event in breach of this Agreement is so contemplated, which statement and assurances shall be delivered in writing within twenty-four (24) hours of Franchisor's request.
In addition, Franchisor may request, and Franchisee shall provide within five (5) business days thereafter, a performance bond from Franchisee, the amount of such bond and the issuing entity to be solely at Franchisor's reasonable discretion.
Source: Item 23 — RECEIPTS (FDD pages 82–573)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, Bojangles has grounds to terminate the franchise agreement if a franchisee attempts to transfer any interest in the agreement, rights to operate the restaurant, or any franchise rights without obtaining prior written consent from Bojangles. This requirement is in place to ensure that any new operators meet Bojangles's standards and are capable of maintaining the brand's reputation and operational consistency.
Specifically, if a franchisee attempts to sell the real property where the restaurant is located, or substantially all assets of the franchise, without Bojangles's prior written consent, it can lead to termination. However, Bojangles may offer an alternative to immediate termination. They might request a statement of intentions and assurances from the franchisee, within 24 hours of the request, that no breach is intended. Additionally, Bojangles may request a performance bond from the franchisee within five business days, with the amount and issuing entity at Bojangles's discretion.
This provision underscores the importance of adhering to the transfer requirements outlined in the franchise agreement. Franchisees need to be aware that failing to obtain Bojangles's consent before transferring any part of their business can have serious repercussions, including the potential loss of their franchise. It is a common practice in franchising to have transfer restrictions to protect the brand and ensure quality control. Therefore, franchisees should maintain open communication with Bojangles and seek approval before making any transfer-related decisions.