Under what conditions will a Bojangles franchisee be required to reimburse the franchisor for inspection costs, including accounting and attorney's fees, related to an audit?

According to Bojangles's 2025 Franchise Disclosure Document, a franchisee may have to reimburse Bojangles for inspection costs if an audit reveals that payments have been understated. Specifically, if an inspection reveals that any payments have been understated in any report to Bojangles, the franchisee must immediately pay the understated amount, along with interest. The interest is calculated from the date the amount was 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, a Bojangles franchisee will be required to reimburse Bojangles for the costs and expenses connected with the inspection if the understatement in any report is five percent (5%) or more. These reimbursable costs and expenses include reasonable accounting and attorneys' fees. This provision ensures that Bojangles is compensated for the expense of the audit when significant discrepancies are discovered in the franchisee's reporting.

This policy incentivizes Bojangles franchisees to maintain accurate and transparent financial reporting. The financial repercussions of underreporting, especially when the understatement is significant, can be substantial, including not only the payment of the deficiency and interest but also the reimbursement of audit-related expenses. Franchisees should ensure their reporting is accurate to avoid these additional costs.