Is a Bonchon franchisee required to secure worker's compensation, disability, and general liability insurance prior to the Initial Training Program?

According to Bonchon's 2025 Franchise Disclosure Document, a franchisee must secure all necessary insurance coverage, including worker's compensation, disability, and general liability, before participating in the Initial Training Program or Partner Training Program. This requirement ensures coverage for any actions or omissions during the training period. These insurance requirements are subject to change.

Bonchon requires franchisees to maintain various insurance policies throughout the term of the agreement. These include broad form comprehensive general liability coverage of at least $2,000,000 in aggregate and $1,000,000 per occurrence, special cause of loss coverage, dram shop liquor liability insurance (if applicable) with limits not less than $1,000,000 per occurrence and in the aggregate, and business interruption insurance. Additionally, if any vehicle is operated in connection with the business, automobile liability insurance with a combined single limit of $1,000,000 is required.

The franchisee must also maintain worker's compensation insurance providing statutory benefits as required by applicable state law, and employer's liability insurance with specific limits: $1,000,000 for each accident and $1,000,000 for each employee for bodily injury by disease. The worker's compensation policy must cover all states in which operations are conducted. Furthermore, franchisees must secure builders' and/or contractor's insurance and performance and completion bonds during construction, refurbishment, renovation, or remodeling, as well as employment practices liability insurance with a limit of not less than $250,000.

Securing the required insurance coverage is a critical pre-opening obligation. Franchisees must furnish copies of all required insurance policies to Bonchon to obtain approval to open their restaurant. Failing to secure and maintain the necessary insurance can result in being in default under the franchise agreement, potentially delaying or preventing the restaurant opening.