What constitutes a material and incurable breach of the Bonchon Franchise Agreement regarding financial records?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. You agree to record all Gross Revenues received by and all expenditures made by you or your franchised Business. You further agree to keep and maintain adequate records of all such Gross Revenues and expenditures and to maintain accurate books, records and tax returns, including related supporting material (such as cash receipts, and credit and charge records) for your franchised Business. We may specify, in our Manuals or otherwise, the forms and media that you will be required to use in recording your franchised Business' Gross Revenues and expenditures. You agree to keep and preserve for seven years (or such longer period as may be required by any law, rule or regulation) the types and classes of electronic and/or other books, records and tax returns that we specify in our Manuals or otherwise, along with all business, personnel, financial and operating records, in any media, relating to your franchised Bonchon Business. If you do not maintain the required records, this will be a material and incurable breach of this Agreement which, unless we waive the breach, will entitle us to terminate this Agreement immediately upon notice to you, with no opportunity to cure.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, failing to maintain the required financial records is considered a material and incurable breach of the Franchise Agreement. Bonchon requires franchisees to meticulously record all gross revenues and expenditures, maintaining accurate books, records, and tax returns with supporting documentation like cash receipts and credit/charge records. These records must be preserved for seven years, or longer if required by law.
Bonchon specifies that if a franchisee fails to maintain these required records, it constitutes a material and incurable breach. Unless Bonchon waives the breach, they are entitled to terminate the Franchise Agreement immediately upon notice, without providing an opportunity for the franchisee to correct the issue.
This requirement underscores the importance Bonchon places on accurate financial reporting and record-keeping. For a prospective franchisee, this means implementing robust accounting practices from the outset and ensuring strict compliance with Bonchon's requirements. Failure to do so could result in immediate termination of the franchise agreement, representing a significant risk.