Under what conditions related to insolvency or bankruptcy will a Bojangles franchisee be deemed in default, leading to automatic termination of the franchise agreement?
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 considered in default of their franchise agreement, leading to automatic termination without notice, under specific insolvency or bankruptcy-related conditions. These conditions include the franchisee becoming insolvent, making a general assignment for the benefit of creditors, or if a bankruptcy petition is filed by the franchisee. Furthermore, if a bankruptcy petition is filed against the franchisee and the franchisee does not oppose it, this also constitutes a default.
The default also occurs if the franchisee is adjudicated bankrupt or insolvent, indicating a formal legal declaration of their financial status. Additionally, if a bill in equity or other proceeding is initiated to appoint a receiver or custodian for the franchisee's business or assets, and the franchisee consents to it, this triggers an automatic termination. Similarly, the appointment of a receiver or custodian (whether permanent or temporary) for the franchisee's assets or property by a court of competent jurisdiction results in default.
Finally, if proceedings for a composition with creditors are instituted by or against the franchisee under any state or federal law, this also leads to automatic termination of the franchise agreement. These stipulations highlight the critical importance of maintaining financial solvency and addressing financial difficulties proactively to avoid losing the Bojangles franchise.