Under what circumstances will a Bojangles franchisee be deemed in default and have their rights automatically terminated without notice?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
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 23 — RECEIPTS (FDD pages 82–573)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, a franchisee can be deemed in default, leading to an automatic termination of their franchise rights without prior notice, under specific financial and legal circumstances. This includes situations where the franchisee becomes insolvent, makes a general assignment for the benefit of creditors, or faces bankruptcy proceedings that they do not oppose.
Specifically, if a franchisee files for bankruptcy or such a petition is filed against them and they do not oppose it, this triggers an immediate default. Similarly, if a franchisee is officially declared bankrupt or insolvent, or if legal proceedings are initiated to appoint a receiver or custodian for their business assets and they consent to it, the agreement can be terminated without notice. These conditions are designed to protect Bojangles from franchisees who are at high risk of failing to meet their financial obligations.
These terms are relatively standard in the franchise industry, as franchisors need to protect their brand and system from the negative impacts of a franchisee's financial distress. A prospective Bojangles franchisee should understand these conditions thoroughly, as any of these events could lead to a swift and immediate end to their franchise agreement without an opportunity to rectify the situation.