What happens if I, my Operating Principal, or General Manager is convicted of a felony that Bonchon believes is related to the operation of the franchised business?

According to Bonchon's 2025 Franchise Disclosure Document, if you, your Operating Principal, or General Manager are convicted of a felony, fraud, crime involving moral turpitude, or any other crime or offense that Bonchon reasonably believes is related to the operation of your franchised business, it can lead to the termination of your Franchise Agreement. This also applies if such a conviction is likely to have an adverse effect on the Bonchon System, the Proprietary Marks, or the goodwill associated with them. This provision extends not only to you as the franchisee but also to any owner, member, shareholder, director, or manager of your business entity, if you are not an individual.

This clause highlights the importance Bonchon places on maintaining the integrity of its brand and system. A criminal conviction of this nature is seen as a significant risk to the reputation and financial interests of the entire franchise network. The FDD specifies that Bonchon must "reasonably believe" that the crime is related to the franchise operation or could harm the brand, which provides a degree of subjectivity to the decision but also implies a need for justifiable cause.

For a prospective franchisee, this underscores the need for careful consideration of the backgrounds and potential risks associated with anyone in a management or ownership position. It also means that any personal legal issues could have serious repercussions for the franchise. Franchisees should seek legal counsel to fully understand their rights and obligations under these circumstances. This type of clause is relatively standard in franchise agreements, as franchisors need to protect their brand from damage caused by the actions of individual franchisees or their employees.