For Bonchon area franchises sold in Indiana, what is the geographical extent of the post-term covenant not to compete?

According to Bonchon's 2025 Franchise Disclosure Document, the geographical extent of the post-term covenant not to compete for area franchises sold in Indiana is limited to the Area Developer's Development Territory. This means that after the termination of the Area Development Agreement, the franchisee is restricted from operating a competing business only within the specific geographic area they were initially granted the rights to develop.

This is a significant modification from the standard non-compete terms, as indicated in Section 11.01 of the Area Development Agreement, which is revised by the Indiana addendum. The standard terms, which are not detailed in the provided excerpts, would typically impose a broader geographical restriction. By limiting the restriction to the Development Territory, Bonchon provides area developers in Indiana with more flexibility to pursue other business ventures after their franchise agreement ends, without being unduly constrained by a wide-ranging non-compete clause.

This revision is favorable for prospective Bonchon area developers in Indiana, as it reduces the potential limitations on their business activities post-termination. However, it is important for potential franchisees to fully understand the definition and scope of their specific Development Territory as defined in their Area Development Agreement to fully grasp the implications of this limited non-compete clause.