What constitutes grounds for termination of the Bonchon Franchise Agreement related to criminal convictions of the franchisee or its principals?

According to Bonchon's 2025 Franchise Disclosure Document, the Franchise Agreement can be terminated if the franchisee, their Area Manager, any District Managers, or, if the franchisee is a business entity, any owner, member, shareholder, director or manager of the entity, is convicted of certain crimes. These include a felony, fraud, a crime involving moral turpitude, or any other crime or offense that Bonchon reasonably believes is related to the franchisee's duties under the agreement or the operation of any Bonchon Businesses.

This also applies if the crime is likely to have an adverse effect on the Bonchon System, the Proprietary Marks, the goodwill associated with the Proprietary Marks, or Bonchon's interest in the System or Proprietary Marks. This provision gives Bonchon broad discretion to terminate the agreement based on criminal convictions, even if the crime is not directly related to the business, if they reasonably believe it could harm the brand or system.

For a prospective Bonchon franchisee, this means that any criminal conviction of themselves or their key personnel, whether related to the business or not, could potentially lead to termination of the Franchise Agreement. It is important to understand the scope of this provision and how Bonchon interprets what constitutes a crime that could have an adverse effect on the system. Franchisees should maintain high ethical standards and ensure that all personnel with significant roles in the business do as well, to avoid potential issues under this clause.