After the third year of operation, what royalty fee rate applies to a Bojangles restaurant?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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 |
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, the royalty fee structure is subject to a reduction incentive program for qualifying restaurants. The standard royalty fee is 4% of gross sales. However, during the first three years of operation, franchisees may benefit from a reduced royalty fee as part of the Development Incentive Program.
Specifically, in the first year, the royalty fee is reduced by 3% of gross sales. In the second year, the reduction is 2% of gross sales, and in the third year, it is 1% of gross sales. After the third year, specifically from the fourth year onward, the royalty fee reverts to the standard rate specified in the Franchise Agreement.
Therefore, after the third year of operation, a Bojangles restaurant will be subject to the standard royalty fee rate as outlined in the Franchise Agreement, without any reduction. This means the franchisee will pay the full 4% royalty fee on gross sales, as the incentive program's royalty fee reductions no longer apply after the initial three-year period.