Under what conditions related to insolvency or bankruptcy will a Bojangles franchisee be automatically considered in default, leading to termination of the franchise agreement without notice?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
A. Franchisee shall be deemed to be in default under this Agreement, and all rights granted herein shall automatically terminate without notice to Franchisee, if Franchisee shall become insolvent or make a general assignment for the benefit of creditors; or if a petition in bankruptcy is filed by Franchisee or such a petition is filed against Franchisee and not opposed by Franchisee; or if Franchisee is adjudicated a bankrupt or insolvent; or if a bill in equity or other proceeding for the appointment of a receiver of Franchisee or other custodian for Franchisee's business or assets is filed and consented to by Franchisee; or if a receiver or other custodian (permanent or temporary) of Franchisee'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 Franchisee.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, a franchisee will be automatically considered in default, leading to the termination of the franchise agreement without notice, under specific insolvency or bankruptcy-related conditions.
These conditions include if the franchisee becomes insolvent or makes a general assignment for the benefit of creditors. Additionally, if a petition in bankruptcy is filed by the franchisee, or if such a petition is filed against the franchisee and not opposed by them, it will trigger an automatic default. Furthermore, adjudication as bankrupt or insolvent also results in automatic default.
The appointment of a receiver or custodian for the franchisee's business or assets, especially if the franchisee consents to the proceedings, also constitutes grounds for automatic termination. Similarly, if proceedings for a composition with creditors are instituted by or against the franchisee under any state or federal law, the agreement will be terminated without notice. These terms are designed to protect Bojangles from financial instability or actions that could jeopardize the brand or its financial interests.