For Bonchon franchises offered and sold in Indiana, does Section 12.04 of the Franchise Agreement regarding the enforcement of covenants not to compete apply?

According to Bonchon's 2025 Franchise Disclosure Document, Section 12.04 of the Franchise Agreement, which pertains to the enforcement of covenants not to compete, will not apply to franchises offered and sold in the State of Indiana. This means that Bonchon franchisees in Indiana will not be subject to the stipulations outlined in Section 12.04 regarding the enforcement of non-compete agreements.

This exception for Indiana franchisees is further reinforced by the Indiana Addendum to the Franchise Agreement, which explicitly states that Section 12.04 does not apply to franchises in Indiana. This addendum also specifies that Indiana law supersedes any conflicting provisions in the Franchise Agreement or New York law, and that venue for litigation will not be limited to New York, as initially stated in Section 32.04 of the Franchise Agreement.

For a prospective Bonchon franchisee in Indiana, this is a significant benefit. The non-application of Section 12.04 provides more flexibility and reduces potential restrictions related to competitive activities, especially after the franchise agreement terminates. However, it is important to note that Section 12.02 regarding the covenant not to compete is revised to limit the geographical extent of the post-term covenant to the franchisee's territory, so some restrictions on competition still apply.