Under what conditions can Bojangles require a franchisee to satisfy outstanding obligations before a transfer is approved?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
(3) If a transfer, alone or together with other previous, simultaneous, or proposed transfers, would have the effect of transferring a controlling interest in the Restaurant, interest in this Agreement, or in the franchise rights or license rights granted hereunder, or in Franchisee, Franchisor may, in its sole discretion, if it does not elect to exercise its option to purchase set forth in Paragraph XIV.C. herein, require any or all of the following as conditions of its approval:
(a) All of Franchisee's accrued and outstanding monetary obligations to third parties and all accrued and outstanding obligations to Franchisor, or any parent, subsidiary or affiliate of Franchisor shall have been satisfied;
(b) Franchisee shall not be in default of any provision of this Agreement, any amendment hereto or successor hereof, or any other agreement between Franchisee and Franchisor, its parents, subsidiaries, or affiliates;
Source: Item 23 — RECEIPTS (FDD pages 82–573)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, Bojangles has the right to require a franchisee to satisfy outstanding obligations before approving a transfer under specific conditions. If a transfer, either alone or combined with previous or proposed transfers, would result in transferring a controlling interest in the restaurant, the agreement, or the franchise rights, Bojangles has the discretion to impose certain conditions for approval.
One of these conditions is that all of the franchisee's outstanding monetary obligations to both third parties and Bojangles, including its parents, subsidiaries, or affiliates, must be satisfied. Additionally, the franchisee must not be in default of any provision of the Franchise Agreement, any amendments to it, or any other agreements with Bojangles, its parents, subsidiaries, or affiliates.
These stipulations ensure that the financial responsibilities and contractual obligations of the franchisee are met before a transfer is approved, protecting Bojangles's interests and maintaining the integrity of the franchise system. This is a fairly standard practice in franchising, as franchisors typically want to ensure that franchisees are in good standing before allowing them to transfer their business to another party.