Under what circumstances will a Bojangles franchisee automatically be deemed in default without notice?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
XIV. DEFAULT AND TERMINATION
- A. Franchisee shall be deemed to be in default under this Agreement, and all rights granted herein shall automatically terminate without notice to Franchisee, if Franchisee shall become insolvent or make a general assignment for the benefit of creditors; or if a petition in bankruptcy is filed by Franchisee or such a petition is filed against Franchisee and not opposed by Franchisee; or if Franchisee is adjudicated a bankrupt or insolvent; or if a bill in equity or other proceeding for the appointment of a receiver of Franchisee or other custodian for Franchisee's business or assets is filed and consented to by Franchisee; or if a receiver or other custodian (permanent or temporary) of Franchisee's assets or property, or any part thereof, is appointed by any court of competent jurisdiction; or if proceedings for a composition with creditors under any state or federal law should be instituted by or against Franchisee.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, a franchisee will automatically be deemed in default of their franchise agreement, without any prior notice from Bojangles, under specific financial circumstances. This immediate termination clause is triggered if the franchisee becomes insolvent, makes a general assignment for the benefit of creditors, or faces bankruptcy proceedings.
Specifically, the franchisee is in default if they file a bankruptcy petition, or if such a petition is filed against them and they do not oppose it. Default also occurs if the franchisee is officially declared bankrupt or insolvent. Similarly, if a bill in equity or other proceeding is initiated to appoint a receiver or custodian for the franchisee's business or assets, and the franchisee consents to this action, it constitutes an immediate default.
Furthermore, the appointment of a receiver or custodian, whether permanent or temporary, for any part of the franchisee's assets or property by a competent court also results in automatic default. Finally, if proceedings for a composition with creditors are instituted by or against the franchisee under any state or federal law, this too leads to immediate default without notice. These conditions highlight the critical importance of maintaining financial stability and avoiding such proceedings to remain in compliance with the Bojangles franchise agreement.