For Bonchon franchisees, what is the maximum liability of the franchisee for direct damages related to the Franchisee Service Agreement?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree that you will, at your sole cost, at all times defend us, any affiliate of ours, the affiliates, subsidiaries, successors, assigns and designees of each; and, the officers, directors, managers, employees, agents, attorneys, shareholders, owners, members, designees and representatives of all of the foregoing (we and all others referenced above being the "Indemnitees"), and indemnify, reimburse and hold harmless us and the Indemnitees to the fullest extent permitted by law, from all claims, losses, liabilities and costs incurred in connection with any judicial, administrative or arbitration action or proceeding (including bankruptcy, insolvency, debtor/creditor or similar proceedings), suit, claim, demand, investigation, or formal or informal inquiry (regardless of whether any of the foregoing is reduced to judgment) or any settlement of the foregoing, which actually or allegedly, directly or indirectly, arises out of, is based upon, is a result of or is related in any way to any element of your entry into this Agreement; your establishment, construction, opening and operation of your Bonchon Restaurant and franchised Business, including any other business operating within or in relation to the Restaurant (which other business, if any, shall be subsumed within this paragraph's references to the Restaurant) and further including (without limitation) any personal, bodily or mental injury, death, property damage or loss, suffered by any customer, visitor, manager, operator, supplier, employee or guest of the franchised Restaurant or Business; crimes committed on or near any of the premises or facilities of your franchised Business or vehicles used by your franchised Business; all acts, errors, neglects or omissions engaged in by you, your contractors or subcontractors, as well as any third party, arising out of or related to the design, construction, conversion, build-out, outfitting, remodeling, renovation or upgrading of your Bonchon Restaurant, whether or not any of the foregoing was approved by us; defects in any Bonchon Restaurant you construct and/or operate, whether or not discoverable by you or by us; all acts, errors, neglects or omissions of you or the franchised Business and/or the owners, officers, directors,
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
Based on the 2025 Bonchon Franchise Disclosure Document, franchisees agree to indemnify Bonchon and its related parties to the fullest extent permitted by law. This means Bonchon franchisees could be responsible for all claims, losses, liabilities, and costs associated with any legal actions or proceedings related to the franchise agreement or the operation of the Bonchon restaurant. This includes, but is not limited to, personal injury, property damage, or any other losses suffered by customers, employees, or other parties.
The franchisee's indemnification extends to various aspects of the business, including the establishment, construction, and operation of the Bonchon restaurant. It also covers any acts, errors, or omissions by the franchisee, their contractors, or subcontractors. This broad indemnification clause means that franchisees bear significant financial responsibility for any issues arising from their business operations, regardless of whether Bonchon was directly involved.
This type of clause is standard in franchise agreements, but the "to the fullest extent permitted by law" wording means the actual liability will depend on applicable state and federal laws. Prospective Bonchon franchisees should consult with a legal professional to fully understand the scope of their potential liability and how it might be limited by law. Understanding the potential financial exposure is crucial before entering into a franchise agreement.