Under what circumstances related to insolvency or bankruptcy will a Bojangles Developer be deemed in default of the Development Agreement, leading to automatic termination without notice?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
VIII. DEFAULT
- A. The rights granted to Developer in this Agreement have been granted in reliance on Developer's representations and assurances, among others, that the conditions set forth in Paragraphs I. and IV. of this Development Agreement will be met by Developer in a timely manner.
- B. Developer shall be deemed to be in default under this Agreement, and all rights granted herein shall automatically terminate without notice to Developer, if Developer shall become insolvent or make a general assignment for the benefit of creditors; or if a petition in bankruptcy is filed by Developer or such a petition is filed against Developer and not opposed by Developer; or if Developer is adjudicated a bankrupt or insolvent; or if a bill in equity or other proceeding for the appointment of a receiver of Developer or other custodian for Developer's business or assets is filed and consented to by Developer; or if a receiver or other custodian (permanent or temporary) of Developer'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 Developer.
Source: Item 23 — RECEIPTS (FDD pages 82–573)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, a Developer will be immediately deemed in default of their Development Agreement, which will automatically terminate without notice, under specific insolvency or bankruptcy-related circumstances.
Specifically, this occurs if the Developer becomes insolvent or makes a general assignment for the benefit of creditors. It also applies if a petition in bankruptcy is filed by the Developer, or if such a petition is filed against them and not opposed. Further, being adjudicated bankrupt or insolvent, or the filing of a bill in equity or other proceeding for the appointment of a receiver of the Developer or other custodian for the Developer's business or assets, consented to by the Developer, will trigger default. Finally, the appointment of a receiver or other custodian (permanent or temporary) of the Developer's assets or property, or any part thereof, by any court of competent jurisdiction, or the institution of proceedings for a composition with creditors under any state or federal law by or against the Developer, will also result in immediate default and termination.
This clause is a standard protective measure for franchisors. It ensures that Bojangles can sever ties with a developer facing severe financial distress, which could negatively impact the brand's reputation and the developer's ability to fulfill their obligations under the Development Agreement. The automatic termination without notice underscores the severity of these financial conditions.
Prospective Bojangles developers should carefully consider these conditions and ensure they have a solid financial plan in place to mitigate the risk of default due to insolvency or bankruptcy. Understanding these terms is crucial for any potential franchisee to assess the risks associated with the Development Agreement.