Does the Bonchon franchise agreement hold the franchisee responsible for claims that Bonchon or its affiliates are the employer of the franchisee or the franchisee's employees?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
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 14.01 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.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the franchise agreement addresses the relationship between Bonchon, its franchisees, and the franchisee's employees. Bonchon franchisees operate as independent contractors and are responsible for managing their own employees.
The agreement stipulates that Bonchon franchisees must communicate to their employees that they, the franchisees, are the employer, not Bonchon. Franchisees must also ensure that payroll checks and other employment-related documents do not reference Bonchon's name or proprietary marks. This is to reinforce the independent contractor status and prevent any confusion about the employer-employee relationship.
Furthermore, the Bonchon franchise agreement includes an indemnification clause. This means that franchisees agree to defend and hold harmless Bonchon and its affiliates from any claims asserting that Bonchon is the employer, joint employer, or co-employer of the franchisee or the franchisee's employees. This includes any claims against Bonchon for the franchisee's violation of labor or wage and hour laws. This provision protects Bonchon from potential liabilities arising from the franchisee's business operations and employment practices.
In practical terms, this means that if a franchisee's employee brings a claim against Bonchon alleging that Bonchon is their employer, the franchisee is responsible for defending Bonchon against that claim and covering any associated costs or liabilities. This underscores the importance of franchisees understanding their responsibilities as employers and complying with all applicable labor laws.