Does the Bonchon franchise agreement allow a franchisee to claim they are an agent or employee of Bonchon?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
s, warranties, guarantees or representations or incur any debt in the name of or on behalf of the other party, or represent that the relationship between us and you is other than that of franchisor and franchisee. We do not assume any liability, and will not be considered liable, for any agreements, representations, or warranties made by you which are not expressly authorized under this Agreement.
You promise that you will not avail yourself of any rights or remedies at law or in equity that may arise from an assertion that: (i) you are our agent, legal representative, subsidiary, joint venturer, partner, employee, or servant; or (ii) we are a joint employer for your employees. If such a claim is brought against us, we may use your covenant in this Section 16.01 as an absolute defense against such claim. Further, if any such claim is brought against us or our affiliates and subsidiaries, and their respective current and former officers, directors, shareholders, partners, employees, predecessors, successors, attorneys, agents, representatives, and assigns, you will indemnify, defend, and hold harmless any such party from and against any such claim.
16.02 Franchisee is the Sole and Exclusive Employer of its Employees
Franchisee hereby irrevocably affirms, attests and covenants its understanding that in no fashion is Franchisee, or may Franchisee be deemed to be, Franchisor's employee (under any theory or definition of "employee" or "employment") and that Franchisee's employees are employed exclusively by Franchisee and in no fashion is Franchisee or any such employee either employed, jointly employed or co-employed by Franchisor. Franchisee further affirms and attests that each of its employees is under the exclusive dominion and control of Franchisee and never under the direct or indirect control of Franchisor in any fashion whatsoever. Franchisee alone hires each of its employees; sets their schedules; establishes their compensation rates; and, pays all salaries, benefits and employment-related liabilities (workers' compensation insurance premiums/payroll taxes/Social Security contributions/Affordable Care Act contributions/unemployment insurance premiums).
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the franchise agreement explicitly prohibits a franchisee from claiming to be an agent or employee of Bonchon. The agreement states that the franchisee promises not to assert they are Bonchon's agent, legal representative, subsidiary, joint venturer, partner, employee, or servant, or that Bonchon is a joint employer of the franchisee's employees. This is a standard provision in franchise agreements to protect the franchisor from potential liabilities arising from the franchisee's actions.
Bonchon retains the right to use this covenant as a defense against any such claims. Furthermore, the franchisee is obligated to indemnify, defend, and hold harmless Bonchon and its affiliates from any claims brought against them based on such assertions. This means the franchisee would be responsible for covering any legal costs or damages incurred by Bonchon if someone claims the franchisee is an agent or employee of Bonchon.
The franchise agreement also specifies that the franchisee must conduct business as an Area Developer and not as an agent of Bonchon Franchise LLC. This reinforces the independent contractor status of the franchisee. The franchisee acknowledges that they alone control the day-to-day operations of their franchised business and will never contend otherwise. The franchisee may not obligate Bonchon for any expenses, liabilities, or other obligations without prior written approval, except as specifically provided in the agreement.
These provisions are designed to maintain a clear distinction between the franchisor-franchisee relationship and prevent any misrepresentation of the franchisee's status. This protects Bonchon from potential legal and financial risks associated with the franchisee's operations. Prospective franchisees should understand these limitations and ensure they operate their business in a manner consistent with their independent contractor status.