Under what circumstances must a Bojangles franchisee obtain and deliver covenants similar to those in Paragraph XVI from individuals associated with the franchisee's business?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
- G. At the request of Franchisor, Franchisee shall obtain and deliver to Franchisor executed covenants similar in substance to those set forth in this Paragraph XVI. (including covenants applicable upon the termination of a person's relationship with Franchisee) from the following persons: all officers, directors, or members, and holders of the securities of Franchisee, and of any corporation or limited liability company directly or indirectly controlling or controlled by Franchisee. Every covenant required by this Paragraph XVI.G. shall be in a form satisfactory to Franchisor, including, without limitation, specific identification of Franchisor as a third-party beneficiary of such covenants with the independent right to enforce them. Failure by Franchisee to obtain execution of a covenant required by this Paragraph XVI.G. or to deliver the covenant to Franchisor shall constitute a default under this Agreement.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, a franchisee must obtain and deliver covenants similar to those in Paragraph XVI from specific individuals if Bojangles requests it. These individuals include all officers, directors, or members, and holders of the securities of the franchisee. This requirement also extends to any corporation or limited liability company that directly or indirectly controls or is controlled by the franchisee.
The covenants must be in a form satisfactory to Bojangles, explicitly identifying Bojangles as a third-party beneficiary with the independent right to enforce them. The covenants also need to be applicable upon the termination of a person's relationship with the franchisee.
Failure to obtain the required covenants or deliver them to Bojangles constitutes a default under the Franchise Agreement. This provision ensures that Bojangles can protect its interests and confidential information by requiring key individuals associated with the franchisee to adhere to specific obligations, particularly regarding non-competition and confidentiality.