What constitutes an 'assignment' of a Bonchon franchise if the franchisee is a business entity?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
You may not sell or otherwise assign or transfer all or any interest in you (if you are a business entity), the franchise conferred by this Agreement, your franchised Business, your Bonchon Restaurant, your right to use the Bonchon System, Proprietary Marks, Confidential Information and/or Manuals, or any interest in any of these, to a third party without our prior written consent. If we do not elect to exercise our right of first refusal (as provided in Section 14.06 below), which right shall not apply in the event that the assignee is a member of your immediate family, then we will not unreasonably withhold consent to the assignment and sale. You agree that it will not be unreasonable for us to impose, among other requirements, the following conditions to granting consent to the proposed assignment and sale:
- A. That the proposed assignee (meaning all individuals and entities which, after the proposed sale, transfer or assignment, will be franchisees under this Agreement or under any successor agreement) applies to us for acceptance as a franchisee, and furnishes to us the information and references that we request to determine the proposed assignee's skills, qualifications, financial condition, background and history, reputation, economic resources, education, managerial and business experience, moral character, credit rating and ability to assume your duties and obligations under this Agreement and any related agreement. You must pay the costs of any such investigation conducted by us.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if the franchisee is a business entity, an assignment includes the transfer, sale, or any other disposal of any ownership interest in the business entity. This encompasses any direct or indirect, voluntary or involuntary transfer by operation of law or otherwise. Specifically, this includes the franchise itself, the franchised business, the Bonchon Restaurant, or the rights to use the Bonchon System, Proprietary Marks, Confidential Information, and Manuals.
Effectively, any change in ownership or control of the business entity that holds the Bonchon franchise is considered an assignment. This broad definition ensures that Bonchon retains control over who operates its franchises and maintains the integrity of its brand. Attempting to transfer any of these interests without Bonchon's written consent is a material breach of the Franchise Agreement.
Bonchon requires franchisees to obtain written consent before any assignment can occur. Bonchon can refuse an assignment if the outlined conditions are not met. This stringent control over assignments is typical in franchising, as franchisors need to ensure that new operators meet their standards and are capable of running the business successfully. Prospective franchisees should be aware of these restrictions and the potential consequences of violating them.