What happens to a Bonchon Area Development Agreement upon the death or disability of the owner?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Section in Area Development Agreement | Summary |
|---|---|---|
| l. Our approval of transfer by you | Section 12.02, 12.03 and 12.04 | No transfer without our consent except as provided in Area Development Agreement (for example, transfer to a business entity you form for convenience). (Subject to state law.) |
| m. Conditions for our | Sections 12.03 | See l., above. |
| approval of transfer | and 12.04 | |
| n. Our right of first | None | Not applicable. |
| refusal to purchase | ||
| your business | ||
| o. Our option to | None | Not applicable |
| purchase your business | ||
| p. Your death or disa- bility | Section 12.04 | On your death or disability (if you are an individual), or the death or disability of your last surviving owner (if you are a business entity), that person’s rights pass to his or her "Estate". The Estate may continue operating the Business if it provides an acceptable Area Business Manager. This Area Business Manager must assume full time operation of the franchise within 90 days of death or disability. (Subject to state law.) |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 71–81)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Section 12.04 of the Area Development Agreement addresses the death or disability of the owner. If the owner is an individual, or the last surviving owner of a business entity, their rights under the Area Development Agreement pass to their Estate.
The Estate has the option to continue operating the Bonchon business, provided they can secure an acceptable Area Business Manager. This manager must be ready to take on the full-time operation of the franchise within 90 days of the owner's death or disability.
This provision ensures business continuity and allows the deceased or disabled owner's heirs to potentially benefit from the franchise agreement. However, it's crucial for the Estate to act quickly and find a qualified Area Business Manager to maintain operations and uphold the standards of the Bonchon franchise. Prospective franchisees should consider this when planning for unforeseen circumstances and discuss potential succession plans with Bonchon.