For Bonchon franchises offered and sold in Indiana, is the franchisee required to indemnify the franchisor for liability caused by the franchisee's proper reliance on procedures or materials provided by the franchisor, notwithstanding Section 8.11 of the Franchise Agreement?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the terms of Section 8.11 of the Franchise Agreement ("Indemnification") or Section 9.03 of the Area Development Agreement ("Indemnification"), neither Franchisee nor Area Developer will be required to indemnify Franchisor and the other Indemnitees for any liability caused by Franchisee's or Area Developer's (as applicable) proper reliance on or use of procedures or materials provided by Franchisor or caused by Franchisor's negligence.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, franchisees in Indiana are not required to indemnify Bonchon for liability caused by the franchisee's proper reliance on procedures or materials provided by Bonchon, despite the terms in Section 8.11 of the Franchise Agreement. This protection extends to liability caused by Bonchon's negligence as well. This modification is specifically outlined in the Indiana Addendum to the Franchise Agreement, which supersedes conflicting provisions in the standard agreement.
This provision is favorable for prospective Bonchon franchisees in Indiana. It means that if a franchisee follows Bonchon's provided procedures or uses Bonchon's materials correctly and still incurs liability, the franchisee will not be required to cover Bonchon's losses. This could occur, for example, if Bonchon provides incorrect cooking instructions that lead to foodborne illness claims.
This addendum offers significant protection to Bonchon franchisees in Indiana, shifting some of the risk back to the franchisor. Franchisees should carefully review the Indiana Addendum to fully understand their rights and obligations under the franchise agreement.