Is there any exception to the non-compete agreement for Bojangles that would allow a developer to operate a competing restaurant within the restricted area?

According to Bojangles's 2025 Franchise Disclosure Document, there are specific conditions under which the non-compete agreement does not apply to a developer. The primary exception is that the non-compete restrictions do not apply if the developer owns less than two percent (2%) of the equity securities in a corporation registered under the Securities Exchange Act of 1934. This exception allows a developer to hold a minor, passive investment in a publicly traded company that may operate a competing restaurant without violating the non-compete agreement.

During the term of the Development Agreement, the developer is restricted from engaging in any restaurant business that competes with Bojangles, specifically those selling fried chicken, biscuits, or similar menu items, within the assigned area or within ten miles of any Bojangles restaurant that is open, planned for construction, or under construction. This restriction also applies to any fast-food restaurant within the same geographic boundaries. After the agreement expires or terminates, this non-compete extends for two years, maintaining similar restrictions unless Bojangles provides written approval to waive these conditions.

These covenants are designed to protect Bojangles's market and confidential information. The restrictions prevent developers from using the knowledge and resources gained from Bojangles to directly compete with the franchise, ensuring that the developer's focus remains on growing the Bojangles brand within their assigned area. The exception for minor stock ownership acknowledges that a small investment does not constitute active involvement in a competing business and is therefore permissible. Prospective developers should carefully consider these non-compete terms and their implications for any existing or planned business ventures.