What is the effect of the Bonchon agreement being enforceable by the parties' permitted assigns?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
We will have the right to assign this Agreement, and all of our rights and privileges under this Agreement, to any person, firm, corporation or other entity, provided that, if the assignment results in the performance by the assignee of our functions under this Agreement: the assignee must, at the
time of the assignment, be financially responsible and economically capable of performing our obligations under this Agreement, and the assignee must expressly assume and agree to perform these obligations.
You acknowledge that we will have the right to sell our company, our assets, our Proprietary Marks and/or our System to a third party; sell privately or publicly some or all of our securities; and/or undertake a refinancing, recapitalization, leveraged buyout or other economic or financial restructuring, and that we and our affiliates have the right to purchase, merge, acquire, be acquired by or affiliate with an existing competitive or non-competitive franchise network, chain or any other business regardless of the location of that network's, chain's or business's facilities, and to operate, franchise or license those businesses and/or facilities as Bonchon Businesses operating under the Proprietary Marks or any other marks following the purchase, merger, acquisition or affiliation, regardless of the location of these facilities, which may be within the near your Restaurant Locations.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Bonchon has the right to assign the Franchise Agreement to another entity. Bonchon can assign the agreement, including all rights and privileges, to any person, firm, corporation, or other entity. However, if the assignment results in the assignee performing Bonchon's duties under the agreement, the assignee must be financially responsible and able to fulfill those obligations. The assignee must also expressly agree to perform these obligations.
Bonchon acknowledges that it has the right to sell the company, its assets, proprietary marks and/or its system to a third party; sell privately or publicly some or all of its securities; and/or undertake a refinancing, recapitalization, leveraged buyout or other economic or financial restructuring. Bonchon and its affiliates also have the right to purchase, merge, acquire, be acquired by or affiliate with an existing competitive or non-competitive franchise network, chain or any other business regardless of the location of that network's, chain's or business's facilities, and to operate, franchise or license those businesses and/or facilities as Bonchon Businesses operating under the Proprietary Marks or any other marks following the purchase, merger, acquisition or affiliation, regardless of the location of these facilities, which may be within the near Restaurant Locations.
For a prospective franchisee, this means that the agreement they sign with Bonchon could be transferred to another company. While Bonchon must ensure the new entity is capable of fulfilling the obligations, the franchisee should be aware that the entity they initially contracted with may change. This is a fairly standard clause in franchise agreements, as it allows the franchisor flexibility in managing and growing the brand.