What happens if a court determines that Bonchon's termination of the franchise was not valid?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon any termination of this Agreement by us for cause, we will have the right immediately to enter and take possession of your Bonchon Restaurant to maintain continuous operation of the previously franchised business, provide for orderly change of management and disposition of personal property, and otherwise protect our interests.
If you dispute the validity of our termination of the franchise, we will nevertheless have the option (which you irrevocably grant) to operate the business pending the final, unappealed determination of the dispute by a court of competent jurisdiction.
If a court of competent jurisdiction makes a final, unappealed determination that the termination was not valid, we agree to make a full and complete accounting for the period during which we operated the previously franchised business.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if a court decides that Bonchon's termination of the franchise was not valid after Bonchon has already taken over operations, Bonchon will provide a full accounting of the business's financials for the period they operated it.
This means that while the legal dispute is ongoing, Bonchon has the option to continue running the restaurant. This clause protects Bonchon's interests by ensuring continuous operation and management during a dispute.
For a prospective franchisee, this highlights the importance of understanding the grounds for termination and the potential consequences of a dispute. While the franchisee can challenge a termination, Bonchon can maintain control of the business during the legal process. The franchisee should seek legal counsel to fully understand their rights and obligations in case of a termination dispute.