If Bonchon assumes control of the franchised business after the death or disability of the franchisee, what management fee will Bonchon charge the Estate?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
From the date of death or disability until a fully trained and qualified Operating Principal assumes full-time operational control of the franchised Business, we may assume full control of and operate the franchised Business, but will have no obligation to do so. If we do so, then during this period, we will deduct our expenses for travel, lodging, meals, and all other expenses and fees from the Business's Gross Revenues and pay ourselves a management fee equal to the greater of (i) two times the compensation paid to the individual(s) assigned by us to operate the Business, or (ii) 10% of the Business's weekly Gross Revenues. This management fee will be in addition to the Continuing Royalties due us under this Agreement. We will then remit any remaining funds to the Estate. The Estate must pay us any deficiency in sums due to us under this Agreement within ten days of our notifying the Estate of the deficiency. We will not be obligated to operate your Business. If we do so, we will not be responsible for any operational losses of the Business, nor will we be obligated to continue operating the Business.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, in the event of the death or disability of a franchisee, Bonchon has the option to assume control of the franchised business. Disability is defined as any physical, emotional, or mental condition preventing the franchisee from fulfilling their obligations for at least 90 consecutive days.
If Bonchon chooses to manage the business, it will deduct expenses for travel, lodging, meals, and other fees from the business's gross revenues. Bonchon will then pay itself a management fee. This management fee is calculated as the greater of two options: either two times the compensation paid to the individuals assigned by Bonchon to operate the business, or 10% of the business's weekly gross revenues.
This management fee is in addition to the continuing royalties already due to Bonchon under the Franchise Agreement. Any remaining funds will be remitted to the franchisee's Estate. Should there be a deficiency in the sums due to Bonchon, the Estate is responsible for covering this within ten days of notification. However, Bonchon is not obligated to operate the business and will not be responsible for any operational losses incurred during this period, nor is it obligated to continue operating the business.