What are the conditions that the Estate of a Bonchon franchisee must meet to continue operating the franchised business after the franchisee's death or disability?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
re excessive. Any such agreement and any party thereto who, as a result of the agreement, may directly or indirectly be involved in the ownership of the assets or operations of the franchised Business must meet such standards and conditions as we have put in place at the time you request our consent.
14.05 Assignment By You – Transfer Upon Death or Disability
Upon your death or disability (as defined below) (if you are an individual), or the death or disability of your last surviving owner (if you are a business entity), that person's rights will pass to his or her estate, as heirs, legates, guardians or representatives, as appropriate (collectively, the "Estate").
The Estate may continue the operation of your franchised Business if: (i) the Estate provides competent and qualified individuals acceptable to us to serve as Operating Principal and General Manager and operate your franchised Business on a full-time basis; (ii) the Operating Principal attends and successfully completes our next offered Initial Training Program or Partner Training Program at the Estate's expense; and, (iii) the Operating Principal assumes full-time operation of
your Business within one month of the date you or your last surviving owner (as applicable) dies or becomes disabled. In the alternative, the Estate may sell the Business within six months of the death or long-term disability in accordance with the provisions of Section 14.04 and subject to our right of first refusal under Section 14.06.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if a franchisee dies or becomes disabled, their estate has specific options and requirements to continue operating the business. If the franchisee was an individual, their rights pass to their estate. If the franchisee was a business entity, the rights pass to the estate upon the death or disability of the last surviving owner.
To continue operations, the estate must provide individuals acceptable to Bonchon to serve as Operating Principal and General Manager. These individuals must operate the franchised business full-time. The Operating Principal must attend and successfully complete Bonchon's next offered Initial Training Program or Partner Training Program at the estate's expense. The Operating Principal must assume full-time operation of the business within one month of the franchisee's death or disability.
Alternatively, the estate can sell the Bonchon business within six months of the death or long-term disability, subject to Bonchon's right of first refusal. Failure to comply with either of these alternatives—continuing operations with a qualified manager or selling the business within the specified timeframe—constitutes a material breach of the Franchise Agreement, potentially leading to immediate termination if not cured. Notably, no transfer fee is required for transfers under these circumstances.