Does the Bonchon franchise agreement contain a covenant not to compete that extends beyond the termination of the franchise, and what is the enforceability of this provision under California law?

According to Bonchon's 2025 Franchise Disclosure Document, the franchise agreement does include a covenant not to compete that extends beyond the termination of the franchise. Specifically for franchisees in California, the addendum to the franchise agreement addresses the enforceability of this provision.

The California addendum states that Section 12.02 of the Franchise Agreement contains a covenant not to compete that extends beyond the termination of the franchise. However, the addendum explicitly notes that this provision may not be enforceable under California law. This means that while Bonchon includes a post-term non-compete clause in its standard agreement, California franchisees may not be legally bound by it due to state-specific regulations.

This information is crucial for prospective Bonchon franchisees in California. While the franchise agreement includes a non-compete clause, its enforceability is questionable under California law. Franchisees should consult with legal counsel to fully understand their rights and obligations regarding non-competition after the franchise term ends. This could significantly impact their ability to operate a similar business or work for a competitor after leaving the Bonchon system.