Can a Bonchon franchisee avoid personally supervising the franchised business?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 15: OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS]
ITEM 15 OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS
Franchise Agreement
You must personally supervise the operation of the franchised Business, unless we permit otherwise in writing. You must devote the necessary time and your best efforts for the proper and effective operation of the Business. If we license you to operate more than one Bonchon Business, you must devote the time necessary for the proper and effective operation of all your Businesses.
If you are an individual, you must serve as Operating Principal and if you are an entity franchisee, you must designate an individual who either owns a majority interest in the franchised Business or, where there is no majority owner, who we otherwise approve of in writing to serve as your Operating Principal. The Operating Principal, who will have complete decision-making authority with regard to your franchised Bonchon Business and have authority to in all respects act on your behalf, will be the sole individual with whom we will be required to communicate when we seek to communicate with you. You must inform us in writing of your Operating Principal and any replacement Operating Principal in advance. We must approve your Operating Principal before you appoint them. Your Operating Principal must complete the Initial Training Program to our satisfaction, if he or she will have on-site supervision of the Restaurant's daily operations on a full-time basis. If your Operating Principal will not engage in the on-site management of the Restaurant's day-to-day operations on a full-time basis, then your Operating Principal must either attend and successfully complete our Initial Training Program or Partner Training Program. After an Operating Principal's death, disability or termination of employment, you must immediately (but no later than 5 days from the occurrence of such event) notify us, and you must designate a successor or acting Operating Principal within 10 days from the occurrence of such event.
[Item 15: OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS]
If an individual, you must either serve as or designate a General Manager. If you are an individual, we recommend that you personally serve as your own General Manager. If you are an entity, then your Operating Principal may serve as your General Manager or you may designate a General Manager. If your Operating Principal will have on-premises management responsibility over the Restaurant's daily operations on a full-time basis, then we will consider your Operating Principal to be the General Manager. The General Manager, who will have full-time day-to-day management responsibility for your Bonchon Business and Restaurant, will exercise on-premises supervision and personally participate in the direct operation of the Business and Restaurant. You must inform us in writing of your General Manager and any replacement General Manager in advance. We must approve your General Manager(s) before you appoint them. Your General Manager(s) must attend and successfully complete the Initial Training Program. In addition to your General Manager, you must employ a second full-time manager to serve as your assistant or kitchen manager (the "Manager"). Your Manager will also have day-to-day management responsibility for your Bonchon Business and Restaurant, and will exercise on-premises supervision and personally participate in the direct operation of the Business and Restaurant. The Manager must attend and successfully complete the Initial Training Program.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 69–71)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, franchisees must personally supervise the operation of the franchised business unless Bonchon permits otherwise in writing. Franchisees are required to devote the necessary time and their best efforts for the proper and effective operation of the business. If a franchisee is licensed to operate more than one Bonchon Business, they must devote the time necessary for the proper and effective operation of all their businesses.
If the franchisee is an individual, they must serve as the Operating Principal. If the franchisee is a business entity, they must designate an individual who either owns a majority interest in the franchised business or, where there is no majority owner, someone Bonchon approves in writing to serve as the Operating Principal. The Operating Principal has complete decision-making authority and the authority to act on the franchisee's behalf. Bonchon will communicate solely with the Operating Principal. The franchisee must inform Bonchon in writing of their Operating Principal and any replacement Operating Principal in advance, and Bonchon must approve them before appointment.
The Operating Principal must complete the Initial Training Program if they will have on-site supervision of the Restaurant's daily operations on a full-time basis. If the Operating Principal will not engage in on-site management of the Restaurant's day-to-day operations full-time, they must either attend and successfully complete Bonchon's Initial Training Program or Partner Training Program. After an Operating Principal's death, disability, or termination of employment, the franchisee must immediately notify Bonchon and designate a successor or acting Operating Principal within 10 days.
Bonchon also requires that franchisees designate a General Manager who has full-time day-to-day management responsibility for the Bonchon Business and Restaurant, exercising on-premises supervision and personally participating in the direct operation of the Business and Restaurant. In addition to the General Manager, franchisees must employ a second full-time manager to serve as an assistant or kitchen manager (the Manager). The Manager will also have day-to-day management responsibility for the Bonchon Business and Restaurant, and will exercise on-premises supervision and personally participate in the direct operation of the Business and Restaurant. The Manager must attend and successfully complete the Initial Training Program.