Are Bonchon franchisees in North Dakota required to consent to termination or liquidated damages, as potentially outlined in Item 17(i) of the Franchise Disclosure Document, Section 18.01 of the Franchise Agreement, and Section 16.01 of the Area Development Agreement?

According to Bonchon's 2025 Franchise Disclosure Document, franchisees in North Dakota are not required to consent to termination or liquidated damages, as these requirements are specifically deleted from all relevant agreements. This applies to Item 17(i) of the Franchise Disclosure Document, Section 18.01 of the Franchise Agreement, and Section 16.01 of the Area Development Agreement. This means that Bonchon franchisees in North Dakota will not be bound by provisions that would otherwise compel them to agree to termination terms or the payment of liquidated damages.

This deletion is further reinforced by the North Dakota Addendum to both the Franchise Agreement and the Disclosure Document, which states that the laws of North Dakota supersede any conflicting provisions in the Franchise Agreement or New York law. This addendum specifically removes the requirement for franchisees to consent to termination or liquidated damages, ensuring that North Dakota law prevails in these matters.

For a prospective Bonchon franchisee in North Dakota, this is a significant benefit. It provides additional protection against potentially onerous termination clauses and financial penalties. Franchise agreements often contain provisions that heavily favor the franchisor, so this modification helps to level the playing field and offers greater security to the franchisee. This also means that any disputes related to termination or damages would likely be resolved under North Dakota law, which may offer different protections and legal standards than New York law, which typically governs Bonchon's standard agreements.

It is important for prospective franchisees to carefully review the North Dakota Addendum in conjunction with the standard Franchise Agreement to fully understand their rights and obligations. While the addendum removes certain requirements, other aspects of the agreement remain in effect. Consulting with a franchise attorney is advisable to ensure a complete understanding of the legal implications and to navigate the specific nuances of franchising in North Dakota.