Is a Bonchon franchisee allowed to transfer the franchise agreement to a 'Specially Designated National or Blocked Person'?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
You understand and acknowledge that we have entered into this Agreement in reliance on and in consideration of your singular personal skill and qualifications (or, if you are a business entity, the personal skill and qualifications of your owners and managers), and the trust and confidence that we repose in you (or your owners and managers, if you are a business entity), and that this Franchise Agreement and the franchise conveyed hereunder is therefore personal to you and is your personal obligation. Accordingly, except as provided below, neither all nor any part of your interest in this Agreement; the franchise conveyed hereby; your rights, privileges or obligations under this Agreement; the franchised Business; your franchised Bonchon Restaurant; the ownership of your franchised Business; or, your rights to use the Bonchon System, Proprietary Marks, Confidential Information and Manuals may in whole or in part be assigned, sold, transferred, shared, sublicensed or divided, voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise, in any fashion without first obtaining our written consent in accordance with this Article 14 and without first complying with our right of first refusal pursuant to Section 14.06 below.
Any actual or attempted assignment, transfer or sale of this Agreement, the franchise conveyed hereunder, the franchised Business, your franchised Bonchon Restaurant, any ownership interest in you (if you are a business entity), any of the other interests, rights or privileges identified in the preceding paragraph, or any interest in any of these, in violation of the terms of this Article 14, will be null, void and of no effect, and will be a material and incurable breach of this Agreement which, unless we waive to the breach, will entitle us to terminate this Agreement immediately upon notice to you, with no opportunity to cure.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
The 2025 Bonchon Franchise Disclosure Document (FDD) outlines specific conditions regarding the transfer of franchise agreements. While the FDD details various scenarios under which a franchisee can transfer their interest, such as to a business entity they form or upon death/disability, it does not explicitly address the possibility of transferring the franchise to a 'Specially Designated National or Blocked Person.'
Bonchon emphasizes that the franchise agreement is personal to the franchisee, and any transfer requires the franchisor's written consent. The franchisor retains the right to impose conditions on the transfer, including assessing the proposed assignee's qualifications, financial condition, and business experience. These stipulations are in place to ensure that any new franchisee meets Bonchon's standards and can uphold the brand's reputation.
Given the absence of a specific clause regarding 'Specially Designated Nationals or Blocked Persons,' prospective franchisees should directly inquire with Bonchon about their policy on such transfers. Understanding the franchisor's stance on this matter is crucial, as transferring a franchise to an entity or individual on a restricted list could have significant legal and financial ramifications.