Can a Bonchon franchisee reduce policy limits, restrict coverage, cancel, or otherwise alter any required insurance policy without Bonchon's consent?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
x" dollars for every "x" dollar amount the customer spends in gift card purchases). You may not offer any coupon without our prior written approval. You are required to use our designated gift card service provider and gift card supplies vendor as a condition of participating in our gift card program.
9. INSURANCE
9.01 Your Required Insurance Coverage
- A. Within ten days following our execution of this Agreement, and thereafter at all times throughout the term of this Agreement, you agree to purchase at your own expense, and maintain in effect at all times, the following categories of insurance coverage in forms and through insurance companies satisfactory to us:
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- Broad form comprehensive general liability coverage, and broad form contractual liability coverage of at least $2,000,000 aggregate and at least $1,000,000 per occurrence. This insurance may not have a deductible or selfinsured retention of over $5,000.
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- Special cause of loss coverage forms (sometimes called "All Risk Coverage") on your Bonchon Restaurant and all fixtures, equipment, supplies and other property used in the operation of the Restaurant, for full repair and replacement value of the machinery, equipment and improvements, including full coverage for loss of income resulting from damage to the Restaurant.
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- Dram Shop Liquor Liability Insurance with limits not less than $1,000,000 per occurrence and in the aggregate.
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- Business interruption insurance in sufficient amounts to cover your Bonchon Restaurant rental expenses, maintenance of competent personnel and other fixed expenses (including payment of Continuing Royalties to us) for a minimum of 12 months loss of income.
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- If any vehicle is operated in connection with the Business, automobile liability insurance with a combined single limit of
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Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to the 2025 Bonchon Franchise Disclosure Document, franchisees must maintain specific insurance coverage throughout the term of their agreement. Bonchon requires franchisees to purchase and maintain categories of insurance coverage in forms and through insurance companies that are satisfactory to Bonchon. These coverages include broad form comprehensive general liability coverage and broad form contractual liability coverage of at least $2,000,000 aggregate and at least $1,000,000 per occurrence, special cause of loss coverage, dram shop liquor liability insurance with limits not less than $1,000,000 per occurrence and in the aggregate, business interruption insurance, automobile liability insurance with a combined single limit of $1,000,000, and workers compensation insurance.
Bonchon requires specific policy limits for various insurance coverages, such as $1,000,000 for bodily injury by accident and disease under Workers Compensation and $2,000,000 for umbrella liability coverage. The franchisee is obligated to renew all insurance policies and provide renewal certificates to Bonchon before the expiration date of the existing policies. Bonchon retains the right to request full copies of all insurance policies at any time.
Failure to comply with these insurance requirements constitutes a material breach of the agreement, potentially leading to immediate termination of the agreement if not waived by Bonchon. The franchisee must also provide certificates of insurance evidencing any additional insurance coverage required by the lease for Remote Kitchen Restaurants, within five days of being required to purchase such insurance and at least five days after each policy expiration/renewal date. These certificates must confirm that the franchisee's coverage is primary and that Bonchon's insurance applies only after the franchisee's policy limits are exhausted.