factual

If the Bonchon franchise agreement expires or terminates, are there any franchisee obligations to Bonchon that survive the expiration or termination?

Bonchon Franchise · 2025 FDD

Answer from 2025 FDD Document

ges 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:

  1. 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.

    1. 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.
    1. 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.
    1. 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.
    1. 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"). This obligation will give rise to and remain, until paid in full, a lien in our favor against any and all of assets, property, furnishings, equipment, signs, fixtures and inventory owned by you or the franchised Business at the time of termination and against any of your money which we are holding or which is otherwise in our possession.
    1. Immediately deliver to us all training or other manuals furnished to you (including the Manuals and Supplements to the Manuals), all Confidential Information, computer software and database material, customer lists, records and files, documents, instructions, form, display items, advertising and promotional material, any and all materials, signs and related items which bear our Proprietary Marks or slogans or insignias or designs, advertising contracts, forms and other materials or property of ours, and any copies of them in your possession which relate to the operation of the franchised Business.

Source: Item 23 — RECEIPTS (FDD pages 92–536)

What This Means (2025 FDD)

According to Bonchon's 2025 Franchise Disclosure Document, several obligations survive the expiration or termination of the franchise agreement. Upon expiration or termination, the franchisee must immediately pay all royalties, fees, and other sums due to Bonchon or its affiliates, plus interest, as well as sums owed to landlords, employees, taxing authorities, advertising agencies, and other third parties. The franchisee must also discontinue using Bonchon's Proprietary Marks and not operate under any name that might suggest they are still associated with Bonchon. They are prohibited from using Bonchon's confidential information, trade secrets, procedures, and know-how. Additionally, the franchisee cannot identify themselves as a current or former Bonchon franchisee.

Within fifteen days of termination or expiration, the franchisee must cancel any assumed name registrations containing the "Bonchon" mark or any other Bonchon proprietary mark. If the franchisee fails to do so, Bonchon has the right to execute the necessary documents on the franchisee's behalf. If Bonchon terminates the agreement for cause, it has the right to take possession of the restaurant to maintain operations and protect its interests. The franchisee is also obligated to pay all losses and expenses Bonchon incurs as a result of the franchisee's default or termination, including damages, costs, attorneys' fees, and experts' fees. This obligation creates a lien in Bonchon's favor against the franchisee's assets.

Furthermore, the termination or expiration of the agreement does not relieve the franchisee of confidentiality obligations or restrictions on copying and using Bonchon's software. The franchisee must return the Bonchon Software and delete any offline copies of proprietary data. The expiration or termination of the agreement does not prejudice Bonchon's rights against the franchisee and does not relieve the franchisee of any obligations existing at the time of expiration or termination, including those that naturally survive the agreement's end. The franchisee must continue to abide by restrictions on using Bonchon's confidential information, trade secrets, and know-how.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.