If the Bonchon Franchise Agreement expires or terminates, are there any franchisee obligations to Bonchon that continue after the expiration or termination?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
constitute an election of remedies by us or an excuse for performance of your obligations hereunder.
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.
18. FURTHER OBLIGATIONS AND RIGHTS FOLLOWING THE TERMINATION OR EXPIRATION OF THIS AGREEMENT
18.01 Further Obligations and Rights Following The Termination or Expiration of this Agreement
If this Agreement expires or terminates for any reason or is assigned by you, you will cease to be an authorized Bonchon franchisee and you will lose all rights to the use of our Proprietary Marks, the Bonchon System, all Confidential Information and know-how owned by us and any goodwill (including "local" goodwill) engendered by the use of our Proprietary Marks and/or attributed to your conduct of the franchised Business.
Upon expiration or earlier termination of this Agreement for whatever reason, you agree to:
- Immediately pay all royalties, fees and other sums due and owing to us or our affiliates, plus interest, and all sums due and owing to any landlord, suppliers, employees, taxing authorities, advertising agencies, lenders and all other third parties.
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- Discontinue the use of the Proprietary Marks, and not operate or do business under any name or in any manner which might tend to give the general public the impression that you are operating a Bonchon Business, a Bonchon Restaurant or any similar business. 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.
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- Take all necessary action to cancel any assumed name or equivalent registration which contains the Proprietary Mark "Bonchon", or any other Proprietary Mark of ours, or any variant, within fifteen days following termination or expiration of this Agreement. If you fail or refuse to do so, we may, in your name, on your behalf and at your expense, execute all documents necessary to cause discontinuance of your use of the name "Bonchon", or any related name used under this Agreement. You irrevocably appoint us as your attorney-in-fact to do so.
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- Upon any termination of this Agreement by us for cause, we will have the right immediately to enter and take possession of your Bonchon Restaurant to maintain continuous operation of the previously franchised business, provide for orderly change of management and disposition of personal property, and otherwise protect our interests. If you dispute the validity of our termination of the franchise, we will nevertheless have the option (which you irrevocably grant) to operate the business pending the final, unappealed determination of the dispute by a court of competent jurisdiction. If a court of competent jurisdiction makes a final, unappealed determination that the termination was not valid, we agree to make a full and complete accounting for the period during which we operated the previously franchised business.
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- If we terminate this Agreement because of your default or you terminate same through failure to make payment following notice and opportunity to cure (pursuant to Section 17.04), you must pay us all losses and expenses we incur as a result of the default or termination, including all damages, costs, expenses, and reasonable attorneys' and experts' fees directly or indirectly related thereto, such as (without limitation) lost profits, lost opportunities, damage inuring to our Proprietary Marks and reputation, travel and personnel costs and the cost of securing a new Business at or proximate to the Restaurant Location (collectively, the "Damages").
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, several obligations continue for the franchisee even after the Franchise Agreement expires or terminates. Bonchon states that the franchisee must immediately pay all outstanding royalties, fees, and other sums owed to Bonchon or its affiliates, including interest, as well as any debts to landlords, suppliers, employees, taxing authorities, advertising agencies, and other third parties.
Additionally, the franchisee must discontinue using Bonchon's Proprietary Marks and must not operate any business that could give the impression of being a Bonchon Restaurant. The franchisee is prohibited from using any of Bonchon's Confidential Information, trade secrets, or know-how acquired during the franchise relationship. Furthermore, the franchisee cannot identify themselves as a current or former Bonchon franchisee.
The franchisee is also required to cancel any assumed name registrations containing the "Bonchon" name or any other Bonchon Proprietary Mark within fifteen days of termination or expiration. Bonchon also states that the expiration or termination of the Agreement does not relieve the franchisee of any obligations to Bonchon at the time of expiration or termination, or terminate any obligations that naturally survive the expiration or termination of the Agreement. If Bonchon terminates the agreement due to the franchisee's default, the franchisee is responsible for all losses and expenses Bonchon incurs as a result of the termination, including damages, costs, attorney's fees, lost profits, and damage to Bonchon's Proprietary Marks and reputation.