What happens if a Bonchon franchisee refuses to allow an inspection or audit of their business?

According to Bonchon's 2025 Franchise Disclosure Document, a franchisee's refusal to allow an inspection or audit of their business constitutes a breach of the franchise agreement. Specifically, if a Bonchon franchisee refuses permission for Bonchon or its representatives to inspect or conduct operational and/or financial audits of the business as outlined in Sections 8.12 and 11.02 of the agreement, it can lead to consequences.

Section 11.02 outlines Bonchon's right to inspect and audit the franchisee's financial records, including books of accounts, bank statements, tax returns, and other relevant documents. This inspection can occur at any time during normal business hours, with or without written notice, and is intended to ensure compliance with the franchise agreement and the Bonchon system.

Refusing to allow such an inspection is considered a serious breach of the agreement. While the FDD excerpt does not explicitly state the exact repercussions of refusing an audit, Item 23 generally discusses actions that Bonchon can take in the event of a franchisee default. A prospective franchisee should carefully review Item 23 and related sections of the Franchise Agreement and consult with a legal professional to fully understand the potential consequences of refusing an inspection or audit.