In the event of a Bonchon franchisee's bankruptcy, what information must be included in the notice to Bonchon regarding a proposed assignment of the franchise agreement?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
by, or assigned to, a third party individual or entity which has made a bona fide offer to accept an assignment of this Agreement as contemplated by the U.S. Bankruptcy Code, then you must notify us of any such proposed assignment or assumption within five days after your receipt of such proposed assignee's offer to accept assignment or to assume your rights and obligations under this Agreement. Such notice must be given to us, in any event, no later than ten days prior to the date application is made to a court of competent jurisdiction for authority and approval to enter into such assignment and assumption.
The notice required above must contain the following: (i) the name and address of the proposed assignee; (ii) all of the terms and conditions of the proposed assignment and assumption; and, (iii) adequate assurance to be provided to us to assure the proposed assignee's future performance (as defined below) under this Agreement, including (without limitation) the assurance referred to in Section 365 of the U.S. Bankruptcy Code and the satisfaction of the preconditions to assignment set forth in Section 14.04 of this Agreement.
We will then have the prior right and option, to be exercised by notice given at any time prior to the effective date of the proposed assignment and assumption, to accept an assignment of this Agreement to ourselves, our affiliate or another franchisee, upon the same terms and conditions, and for the same consideration (if any), as in the bona fide offer made by the proposed assignee, less any brokerage commissions or other expenses which may be saved by you as a result of our exercise of the rights and options granted to us herein. Under no circumstance shall we be liable for the payment of any brokerage commissions or other expenses as a result of our exercise of our rights and options hereunder unless we otherwise agree in writing.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if a franchisee's agreement is considered for assignment due to bankruptcy, Bonchon must be notified within five days of receiving the proposed assignee's offer. This notification must occur no later than ten days before applying to a court for approval of the assignment.
The notice to Bonchon must include specific details: the name and address of the proposed assignee, all terms and conditions of the proposed assignment, and assurance of the assignee's future performance under the agreement. This assurance should align with Section 365 of the U.S. Bankruptcy Code and satisfy the preconditions for assignment as outlined in Section 14.04 of the Bonchon Franchise Agreement.
Bonchon retains the right to accept the assignment themselves, or assign it to an affiliate or another franchisee, under the same terms as the proposed assignee's offer. This right must be exercised before the effective date of the proposed assignment. If Bonchon exercises this right, the franchisee is not liable for brokerage commissions or other expenses, unless otherwise agreed in writing.