Under the Bojangles franchise agreement, what constitutes a material breach regarding transfer of interest?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
- (8) If Franchisee ceases to operate or otherwise abandons, or attempts to cease to operate or abandon, the Restaurant or enters into an agreement to sell, or sells, or purports or attempts to sell, the real property upon which the Restaurant is situated, or substantially all right, title and interest in and to the Restaurant or real property lease, or substantially all of the assets of Franchisee or of the Restaurant, without Franchisor's prior written consent; provided, however, that upon the occurrence of any of the foregoing events, Franchisor may, in lieu of immediate termination of this Agreement, request from Franchisee, a statement of intentions and assurances that no event in breach of this Agreement is so contemplated, which statement and assurances shall be delivered in writing within twenty-four (24) hours of Franchisor's request.
In addition Franchisor may request, and Franchisee shall provide within five (5) business days thereafter, a performance bond from Franchisee, the amount of such bond and the issuing entity to be solely at Franchisor's reasonable discretion.
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles' 2025 Franchise Disclosure Document, several actions related to the restaurant's operation or ownership can be considered a breach of the franchise agreement, particularly concerning transfer of interest. Specifically, if a franchisee ceases to operate or abandons the restaurant, or attempts to do so, it is considered a breach. Similarly, entering into an agreement to sell, selling, or attempting to sell the real property where the restaurant is located, or substantially all rights and interest in the restaurant or its lease, or substantially all of the franchisee's assets or the restaurant's assets, without Bojangles' prior written consent, constitutes a breach.
However, Bojangles may offer the franchisee an opportunity to provide a statement of intentions and assurances that no breach is contemplated, which must be delivered within 24 hours of the request. Bojangles may also request a performance bond from the franchisee, with the amount and issuing entity determined at Bojangles' discretion, to be provided within five business days.
These stipulations are designed to protect Bojangles' interests by ensuring that franchisees maintain consistent operation and do not transfer ownership or assets without the franchisor's approval. This allows Bojangles to maintain control over the brand and ensure that any changes in ownership or operation align with their standards and strategic goals. Franchisees need to be aware of these conditions to avoid potential breaches and maintain a good relationship with the franchisor.