Under what circumstances will a Bojangles franchisee be required to reimburse the franchisor for the costs and expenses of an inspection, including accounting and attorneys' fees?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor or its designated agents shall have the right at all reasonable times to examine and copy, at Franchisor's expense, the books, records, and tax returns of Franchisee. Franchisor shall also have the right, at any time, to have an independent audit made of the books of Franchisee. If an inspection should reveal that any payments have been understated in any report to Franchisor, then Franchisee shall immediately pay to Franchisor the amount understated upon demand, in addition to interest from the date such amount was due until paid, at one and onehalf percent (1½%) per month compounded monthly, or the maximum rate permitted by law, whichever is less. If an inspection discloses an understatement in any report of five percent (5%) or more, Franchisee shall, in addition, reimburse Franchisor for any and all costs and expenses connected with the inspection (including, without limitation, reasonable accounting and attorneys' fees). The foregoing remedies shall be in addition to any other remedies Franchisor may have.
Source: Item 23 — RECEIPTS (FDD pages 82–573)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, a franchisee may be required to reimburse Bojangles for inspection costs under specific conditions. If Bojangles conducts an inspection of the franchisee's records and discovers that the franchisee has understated any payments in their reports to Bojangles, the franchisee is obligated to pay the understated amount immediately, along with interest. This interest is calculated from the date the amount was originally due until it is paid, at a rate of one and one-half percent (1½%) per month compounded monthly, or the maximum rate permitted by law, whichever is less.
In addition to paying the understated amount and interest, the franchisee will also be responsible for reimbursing Bojangles for all costs and expenses associated with the inspection if the inspection reveals a significant understatement. Specifically, if the inspection uncovers an understatement of five percent (5%) or more in any report, the franchisee must reimburse Bojangles for all inspection-related costs. These costs include, but are not limited to, reasonable accounting and attorneys' fees incurred by Bojangles during the inspection.
This provision serves as a financial deterrent against inaccurate reporting by franchisees. It ensures that Bojangles can recover the costs associated with verifying financial reports, especially when significant discrepancies are found. For a prospective franchisee, this highlights the importance of maintaining accurate and transparent financial records to avoid potential reimbursement obligations for inspection costs and associated fees.