Does the Bonchon franchise agreement allow a franchisee to disclaim reliance on statements made by the franchisor or its representatives?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
No statement, questionnaire, or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
26. INTEGRATION OF AGREEMENT
26.01 Integration of Agreement
This Agreement, all exhibits to this Agreement, and all ancillary agreements executed contemporaneously with this Agreement constitute the entire agreement between the parties with reference to the subject matter of this Agreement and supersede any and all prior negotiations, understandings, representations and agreements. Nothing in this or any related Agreement, however, is intended to disclaim or require you to waive reliance on any representation that we made in the Franchise Disclosure Document that we provided to you. You specifically acknowledge that the only financial performance information we furnish is set forth in Item 19 of our franchise disclosure document; that no officer, director, employee, agent, representative or independent contractor of ours is authorized to furnish you with any other financial performance information. For the purpose of this Agreement, "financial performance information" means information given, whether orally, in writing or visually which states, suggests or infers a specific level or range of historic or prospective sales, expenses and/or profits of franchised or non-franchised Bonchon Businesses and Restaurants.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to the 2025 Bonchon Franchise Disclosure Document, the franchise agreement generally does not allow a franchisee to disclaim reliance on statements made by Bonchon or its representatives. Specifically, addenda for California, Hawaii, Illinois, and Rhode Island state that no statement, questionnaire, or acknowledgement signed by a franchisee can waive claims under state franchise law, including fraud, or disclaim reliance on statements made by Bonchon or its representatives. This provision supersedes any other conflicting term in any document related to the franchise agreement. This protection ensures franchisees in these states can hold Bonchon accountable for representations made during the franchise sales process. However, it is important to note that these protections are specific to those states.
For states other than California, Hawaii, Illinois, North Dakota and Rhode Island, the integration clause in the Bonchon franchise agreement addresses the entire agreement between the parties, superseding prior negotiations and understandings. However, this integration clause explicitly states that nothing in the agreement is intended to disclaim or require a franchisee to waive reliance on any representation made by Bonchon in the Franchise Disclosure Document (FDD). This means that while previous discussions or agreements might not be binding, Bonchon cannot prevent a franchisee from relying on the information presented in the FDD itself.
In practice, this means that a prospective Bonchon franchisee should carefully review the FDD and any representations made by Bonchon during the sales process, particularly in states without specific addenda. While the integration clause protects reliance on the FDD, it's crucial to document and verify any additional claims or promises made by Bonchon representatives to ensure they align with the FDD and to seek legal advice to understand the full scope of their rights and obligations. Franchisees should be aware of the specific protections afforded to them under the laws of their state, as these can significantly impact their ability to pursue claims against Bonchon based on misrepresentations or fraud.