What happens to my obligations to Bonchon if the assignee executes a new Bonchon Franchise Agreement?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
ement 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.
- H. That the assignee executes a new Bonchon Franchise Agreement, and all other agreements required of new franchisees, in the form and on the terms and conditions we then offer to prospective franchisees, which terms and conditions may vary significantly from this Agreement. The assignee will not be obligated to pay another Initial Franchise Fee under the new Agreement but will be required to pay our then-current fees for furnishing our Initial Training Program and/or Partner Training Program and any other services we are required to furnish under the new Agreement. The term of the new Franchise Agreement will be equal to the balance of the term of this Agreement. The execution of the new Franchise Agreement will terminate this Agreement, except for your guarantees; any of your obligations to us or our affiliates which remain outstanding and/or unsatisfied; and, the post-termination and post-expiration provisions of this Agreement which, by their nature, will survive.
- I. That the assignee has acquired, or will be able to immediately acquire following the execution of the new Franchise Agreement, all permits, licenses and other authorizations required by any federal, state or local, rule or regulation to operate the franchised Business.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if an assignee executes a new Bonchon Franchise Agreement, the original agreement is terminated, but with some important exceptions. While the assignee won't have to pay another initial franchise fee, they will be required to pay the then-current fees for the Initial Training Program, Partner Training Program, and any other services Bonchon is required to furnish under the new agreement. The term of the new Franchise Agreement will be equal to the balance of the term of the original agreement.
Even with the new agreement in place, certain obligations of the original franchisee survive. Specifically, any guarantees made by the original franchisee, any outstanding obligations to Bonchon or its affiliates, and the post-termination and post-expiration provisions of the original agreement remain in effect. This means that even after the assignment, the original franchisee could still be liable for certain debts or actions related to the franchise.
Furthermore, the original franchisee remains fully liable and responsible for all obligations to Bonchon and its affiliates that arose in connection with the operation of the franchised business prior to the effective date of the assignee's new Franchise Agreement. This includes the obligation to indemnify Bonchon and other indemnitees. Bonchon may also require the original franchisee to execute documents to further evidence this liability. Therefore, it's crucial for franchisees to understand that assigning the franchise doesn't completely absolve them of past responsibilities and potential liabilities.