What happens if I violate the Bonchon confidentiality agreement?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
You do not comply with the covenant not to compete during the term of this Franchise Agreement; violate the restrictions pertaining to the use of Confidential Information contained in this Agreement; or, do not obtain the execution of the additional covenants required by this Agreement.
12. CONFIDENTIAL INFORMATION AND COVENANTS NOT TO COMPETE
12.01 Restriction on Use of Confidential Information
You agree to use and permit the use of our Confidential Information (as defined below) solely in connection with the operation of your franchised Bonchon Business. You further agree that you will never – during the Initial Term or any Successor Term of this Agreement, or any time after this or any Successor Agreement expires or terminates, or your rights under this Agreement or any Successor Agreement are assigned or terminated – divulge or use any of our Confidential Information for the benefit of yourself, your owners (if you are a business entity) any third party (including any person, business entity or enterprise of any type or nature), nor will you directly or indirectly aid any such third party to imitate, duplicate or "reverse engineer" any of our Confidential Information.
"Confidential Information" includes (without limitation) all information, knowledge, trade secrets or know-how utilized or embraced by the Bonchon System or which otherwise concerns your or our systems of operation, programs, services, products, customers, practices, materials, books, records, manuals, computer files, databases or software. Confidential Information includes (without limitation): all elements of the Bonchon System and all products, services, equipment, technologies, recipes, food and beverage preparation techniques, policies, standards, requirements, criteria and procedures that now or in the future are a part of the Bonchon System; our Manuals (including Supplements to the Manuals); all specifications, sources of supply, all procedures, systems, techniques and activities employed by us or by you in the offer and sale of products and/or services at or from your franchised Bonchon Business; all pricing paradigms established by us or by you; all of our and/or your sources (or prospective sources) of supply and all information pertaining to same (including wholesale pricing structures, the contents of sourcing agreements and the identity of
Alternatively, should we, in fact, be capable of precisely ascertaining and quantifying the damages we have suffered and will suffer as result of your uncured default or the premature termination of this Agreement, then we may (in lieu of seeking Liquidated Damages) seek actual Damages as defined in Section 18.01(5) below.
You may not use, in any manner or for any purpose, directly or indirectly, any of our Confidential Information, trade secrets, procedures, forms, techniques, know-how or materials acquired by you by virtue of the relationship established by this Agreement.
You may never identify yourself to the public in any fashion whatsoever as a current or former Bonchon franchisee.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, violating the restrictions on using confidential information included in the agreement can lead to the termination of the franchise agreement. Specifically, Item 23 outlines various scenarios that could lead to termination, including failure to comply with the confidentiality clauses. This means that if a franchisee divulges or misuses Bonchon's confidential information, Bonchon has grounds to terminate the franchise agreement.
Confidential information, as defined in Section 12.01, includes a wide array of proprietary assets, such as trade secrets, know-how, operational systems, programs, services, products, customer data, practices, materials, books, records, manuals, computer files, databases, and software. It also encompasses all elements of the Bonchon System, including products, services, equipment, technologies, recipes, food and beverage preparation techniques, policies, standards, requirements, criteria, and procedures. The definition extends to manuals, specifications, sources of supply, procedures, systems, techniques, activities, pricing paradigms, and information pertaining to suppliers.
Following termination due to a breach of confidentiality, the franchisee must cease using Bonchon's Proprietary Marks and the Bonchon System. They are also barred from operating under any name that might suggest an affiliation with Bonchon. Furthermore, the franchisee is prohibited from using any of Bonchon's confidential information, trade secrets, procedures, forms, techniques, know-how, or materials acquired during the franchise relationship. The franchisee also cannot present themselves as a current or former Bonchon franchisee. These restrictions extend beyond the termination date, ensuring the continued protection of Bonchon's proprietary information and brand identity.
In addition to immediate termination, Bonchon retains the right to seek damages resulting from the breach of confidentiality. This could include actual damages suffered as a result of the franchisee's actions. Therefore, prospective franchisees should understand the breadth of what Bonchon considers confidential information and take precautions to protect it, as violations can have significant legal and financial repercussions.