Under what conditions will a Bojangles franchisee be required to reimburse the franchisor for costs and expenses related to an inspection of their books, including accounting and attorneys' fees?

According to Bojangles's 2025 Franchise Disclosure Document, a franchisee may have to reimburse Bojangles for inspection costs under specific circumstances. Bojangles, or its agents, has the right to inspect the franchisee's books, records, and tax returns at any reasonable time. If an inspection reveals that the franchisee has understated any payments in their reports to Bojangles, the franchisee must immediately pay the understated amount, along with interest. The interest is calculated at one and one-half percent (1½%) per month compounded monthly, or the maximum rate permitted by law, whichever is less, from the date the amount was originally due.

More significantly, if the inspection uncovers an understatement of five percent (5%) or more in any report, the franchisee is obligated to reimburse Bojangles for all costs and expenses associated with the inspection. This reimbursement includes, but is not limited to, reasonable accounting and attorneys' fees. This provision serves as a strong incentive for franchisees to ensure the accuracy of their financial reporting.

This type of clause is relatively standard in franchise agreements. It protects Bojangles from financial misreporting and ensures that franchisees accurately report their sales and pay the correct royalties and other fees. For a prospective franchisee, this highlights the importance of maintaining accurate and transparent financial records. Failure to do so could result in not only back payments and interest but also significant additional expenses for inspection costs.