What constitutes a default related to trade accounts for a Bonchon franchisee?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to maintain your trade accounts in a current status and to seek to promptly resolve any disputes with trade suppliers. If you do not maintain your trade accounts in a current fashion, we may pay any or all of the accounts on your behalf, but we will have no obligation to do so. If we pay any accounts on your behalf, then you agree to immediately repay us as provided by Section 5.06 (E). If you do not keep your trade accounts current or make immediate repayment to us, this will be a material breach of this Agreement entitling us to terminate this Agreement following our giving you notice and an opportunity to cure your breach.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a franchisee can be in default if they fail to maintain their trade accounts in a current status or fail to promptly resolve any disputes with their trade suppliers. This means Bonchon franchisees are expected to pay their suppliers on time and address any disagreements quickly.
Bonchon has the option to pay any or all of the franchisee's accounts on their behalf, but they are not obligated to do so. If Bonchon does pay these accounts, the franchisee must immediately repay Bonchon as per Section 5.06 (E) of the agreement.
Failure to keep trade accounts current or to make immediate repayment to Bonchon constitutes a material breach of the Franchise Agreement. This gives Bonchon the right to terminate the agreement, provided they give the franchisee notice and an opportunity to correct the breach. This highlights the importance of maintaining good relationships with suppliers and managing finances responsibly as a Bonchon franchisee.