Does the Bonchon franchise agreement include exhibits related to confidentiality and non-competition?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 12.02 of the Franchise Agreement ("Covenant Not to Compete"), and the Confidentiality/Non-Competition Agreement and Confidentiality Agreement attached to the Franchise Agreement, are each amended to add that non-parties to the Franchise Agreement are only bound to the confidentiality and/or non-competition provisions if they execute such Confidentiality/Non-Competition Agreement themselves.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the franchise agreement includes both a Confidentiality/Non-Competition Agreement and a Confidentiality Agreement. These agreements are attached to the Franchise Agreement. Furthermore, Section 12.02 of the Franchise Agreement addresses the covenant not to compete. These agreements outline the restrictions and obligations related to protecting Bonchon's confidential information and preventing unfair competition from franchisees or related parties.
Specifically, the FDD states that non-parties to the Franchise Agreement are only bound by the confidentiality and/or non-competition provisions if they execute such Confidentiality/Non-Competition Agreement themselves. This clarifies that individuals or entities not directly part of the franchise agreement must sign a separate agreement to be legally bound by these restrictions. This is a common practice to ensure that all relevant parties, such as owners or managers, are held accountable.
Moreover, the franchisee must ensure that if they sell, assign, lease, or sublease their Restaurant and/or Restaurant Location, the new party intending to conduct a Competitive Business secures a written agreement stating they have no intent to conduct a Competitive Business. This places an affirmative duty on the franchisee to protect Bonchon's interests even when transferring the business to another party. The agreement extends to individuals with legal or beneficial interest, including family members and beneficiaries, ensuring broad coverage of the non-compete obligations.
These measures are designed to protect Bonchon's business model, trade secrets, and market position by preventing franchisees and related parties from using confidential information or competing with the Bonchon system during and after the franchise term. Prospective franchisees should carefully review these agreements and understand the scope of the restrictions before signing the franchise agreement.