If a Bonchon Franchise Agreement is terminated due to the franchisee's default, what financial obligations does the franchisee have to Bonchon?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
hise, 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"). 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.
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Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if the Franchise Agreement is terminated because of the franchisee's default, the franchisee must pay Bonchon all losses and expenses Bonchon incurs as a result of the default or termination. This means a franchisee could be responsible for covering a range of costs Bonchon experiences due to the franchisee's failure to uphold the agreement.
Additionally, upon termination, the franchisee must immediately pay all royalties, fees, and other sums due to Bonchon or its affiliates, including interest. The franchisee is also responsible for settling all outstanding payments owed to landlords, suppliers, employees, taxing authorities, advertising agencies, lenders, and other third parties. This ensures that all financial obligations related to the Bonchon franchise are resolved promptly.
Bonchon also has the right to enter and take possession of the franchisee's restaurant to maintain continuous operation, manage the change of management, dispose of personal property, and protect Bonchon's interests. If the franchisee disputes the termination's validity, Bonchon still has the option to operate the business pending a final court decision. If the court determines the termination was invalid, Bonchon must provide a full accounting for the period they operated the business.