Does the Bonchon Franchise Agreement state that any claims a franchisee may have against Bonchon will constitute a defense against Bonchon's enforcement of the covenants not to compete?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
I acknowledge that violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to Franchisor and Franchisee for which no adequate remedy at law will be available. Accordingly, I hereby consent to the entry of an injunction procured by Franchisor or Franchisee (or both) prohibiting any conduct by me in violation of the terms of those covenants not to compete and/or restrictions on the use of confidential information set forth in this agreement. I expressly agree that it may conclusively be presumed in any legal action that any violation of the terms of these covenants not to compete was accomplished by and through my unlawful utilization of Franchisor's Confidential Information. Further, I expressly agree that any claims I may have against Franchisor will not constitute a defense to Franchisor's enforcement of the covenants not to compete set forth in this Agreement. I further agree to pay all costs and expenses (including reasonable attorneys' and experts' fees) incurred by Franchisor in connection with the enforcement of those covenants not to compete set forth in this Agreement.
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 states that any claims a franchisee may have against Bonchon will not serve as a defense against Bonchon's enforcement of the covenants not to compete. This means that even if a franchisee believes Bonchon has acted wrongly or breached the agreement, they cannot use these claims to avoid complying with the non-compete obligations.
This provision is significant because it limits a franchisee's ability to challenge the enforcement of non-compete clauses. Non-compete clauses typically restrict a franchisee's ability to operate a similar business within a certain geographic area and time frame after the franchise agreement ends. By agreeing that claims against Bonchon do not constitute a defense, franchisees essentially waive their right to argue that Bonchon's alleged misconduct justifies their violation of the non-compete terms.
Furthermore, the agreement stipulates that the franchisee will cover all costs and expenses, including reasonable attorneys' and experts' fees, incurred by Bonchon to enforce these covenants. This financial responsibility further disincentivizes franchisees from contesting the non-compete obligations, as they risk incurring substantial legal costs if they do not comply and Bonchon pursues enforcement.
This type of clause is not uncommon in franchise agreements, as franchisors seek to protect their brand and market share. However, prospective Bonchon franchisees should carefully consider the implications of this provision and seek legal counsel to fully understand their rights and obligations under the agreement.