What happens if a Bonchon franchisee has existing defaults at the time of assignment?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
- G.
That, as of the date of the assignment, you have cured any existing defaults under any provisions of this Agreement or any other agreement or arrangement with us or our affiliates, and have fully satisfied in all respects all of your accrued and/or then-current monetary and other obligations to us and our affiliates (under this Agreement or otherwise), all sources of financing of your franchised Business and all material sources of supply of your 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 franchisee has existing defaults under any agreement with Bonchon or its affiliates at the time of assignment, those defaults must be cured. Specifically, the franchisee must fully satisfy all accrued and current monetary and other obligations to Bonchon and its affiliates, as well as to all sources of financing and supply for the franchised business.
This requirement ensures that the Bonchon franchise system maintains its financial integrity and operational standards. By requiring the franchisee to resolve all outstanding obligations, Bonchon aims to prevent the transfer of financial or operational problems to the new assignee. This protects the brand's reputation and the interests of other franchisees within the system.
For a prospective Bonchon franchisee looking to sell their business, this means they must address any outstanding financial or operational issues before the assignment can be approved. Failure to do so could prevent the sale from going through, potentially causing financial losses for the franchisee. It is crucial to maintain good standing with Bonchon and all related parties to ensure a smooth transfer process.