What is the deadline for the Estate of a Bonchon franchisee to either have a qualified Operating Principal assume full-time operation or sell the business after the death or disability of the franchisee?
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, following the death or disability of a franchisee, their estate has specific timeframes to address the business's operation. The estate can continue operating the Bonchon franchised business if they provide competent and qualified individuals to serve as Operating Principal and General Manager on a full-time basis. The Operating Principal must also attend and successfully complete Bonchon's next offered Initial Training Program or Partner Training Program at the estate's expense.
Specifically, the Operating Principal must assume full-time operation of the Bonchon business within one month of the date of death or disability. Alternatively, the estate has the option to sell the Bonchon business within six months of the death or long-term disability. This sale must comply with the provisions outlined in Section 14.04 of the franchise agreement and is subject to Bonchon's right of first refusal as per Section 14.06.
Failure to meet either of these deadlines—having a qualified Operating Principal take over within one month or selling the business within six months—constitutes a material breach of the agreement. Unless the estate rectifies the situation as per Section 17.03, Bonchon may terminate the agreement immediately. It's important to note that any transfer of the franchise under these conditions will not incur a transfer fee.