To what extent are transfer fees collectable from a Bonchon franchisee?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Transfer fees are collectable to the extent that they reflect the Franchisor's reasonable estimated or actual costs in effecting a transfer.
That you pay us a transfer fee of $15,000 or such greater amount as is necessary to reimburse us for our reasonable costs and expenses associated with the application for transfer (including costs relating to the review of the application, training of the assignee and legal and accounting fees). Notwithstanding the foregoing, there will be no transfer fee if the assignee is a member of your immediate family.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, transfer fees are collectable to the extent that they reflect Bonchon's reasonable estimated or actual costs in facilitating a transfer. This means Bonchon can only charge a transfer fee that covers the expenses they incur during the transfer process.
Specifically, if a franchisee sells their Bonchon restaurant to a third party, Bonchon may impose certain conditions for granting consent to the sale. These conditions include the proposed assignee applying for acceptance as a franchisee and providing necessary information. The franchisee must cover the costs of any investigation Bonchon conducts on the proposed assignee. Additionally, the proposed assignee may need to attend a personal interview at Bonchon's corporate office, or another designated location, at their own expense. If Bonchon chooses to meet the proposed assignee at their place of business or residence, the franchisee will reimburse Bonchon for all travel, lodging, meal, and personal expenses related to the meeting.
Bonchon outlines a specific transfer fee of $15,000, or a greater amount if necessary to cover reasonable costs and expenses associated with the application for transfer. These costs include reviewing the application, training the assignee, and covering legal and accounting fees. However, this transfer fee is waived if the assignee is an immediate family member. Furthermore, the franchisee or transferee is responsible for upgrading the Bonchon Restaurant to meet Bonchon's current standards and specifications within a reasonable timeframe, at their own expense. They must also arrange an inspection of the Bonchon Restaurant prior to the transfer and pay an On-Site Inspection Upon Transfer Fee of $250 per inspector per day, plus lodging, transportation, and food costs.
It is important to note that if a franchisee assigns the franchise to a business entity they form for convenience of ownership, no transfer fee is required. This provides an exception to the standard transfer fee requirements when the ownership change is merely a formality.