Under what conditions can Bojangles reduce the scope of the non-compete covenants outlined in Paragraph XVI.A?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
n as of the termination or expiration of this Agreement, or (ii) within the designated market area within which the Restaurant is situated.
- B. Paragraph XVI.A. shall not apply to ownership by Franchisee of less than two percent (2%) beneficial interest in the outstanding equity securities of any corporation which is registered under the Securities Exchange Act of 1934.
- C. The parties agree that each of the foregoing covenants shall be construed as independent of any other covenant or provision of this Agreement. If all or any portion of a covenant in this Paragraph XVI.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, Paragraph XVI.A outlines non-compete covenants for franchisees. However, there are specific conditions under which these covenants may be reduced in scope.
The non-compete covenants in Paragraph XVI.A do not apply if a franchisee owns less than two percent (2%) beneficial interest in the outstanding equity securities of any corporation registered under the Securities Exchange Act of 1934. This exception allows franchisees to hold minor investments in publicly traded companies, even if those companies operate businesses that compete with Bojangles.
Additionally, if a court or agency with valid jurisdiction issues a final decision stating that any portion of the non-compete covenant in Paragraph XVIII is unreasonable or unenforceable, the franchisee agrees to be bound by a lesser covenant. This lesser covenant would impose the maximum duty permitted by law, as if it were separately stated in Paragraph XVIII. This ensures that the non-compete is enforced to the fullest extent legally possible, while also respecting judicial decisions that may limit its scope. Note that this clause refers to Paragraph XVIII, not XVI.A as stated in the question.