If a Bonchon franchisee is convicted of a felony, does Bonchon have the right to terminate the agreement immediately?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
equipment is instituted
against you and is not dismissed or settled by the earlier of (i) thirty (30) days from commencement or (ii) consummation of such sale; or, if you are a business entity, your governing body adopts any resolution or otherwise authorizes action to approve any of the foregoing activities.
17.02 Termination By Us Upon Notice – No Opportunity To Cure
You will have materially breached this Agreement and we may, at our option, terminate this Agreement and all rights granted under this Agreement, without giving you any opportunity to cure the breach, effective immediately upon your receipt of notice (which, whether sent by certified mail, registered mail, overnight courier or personal physical delivery, will be deemed to have been received by you upon delivery or first a
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Bonchon has the right to terminate the franchise agreement immediately without an opportunity to cure under certain conditions. Specifically, if a franchisee is convicted of a felony or any other crime that could adversely affect the Bonchon brand, the franchisor can terminate the agreement. This also applies if the franchisee pleads guilty or no contest to such a crime.
This provision is significant for prospective franchisees as it highlights the importance of maintaining a clean criminal record and adhering to ethical business practices. A criminal conviction, even if seemingly unrelated to the operation of the Bonchon restaurant, could lead to the termination of the franchise agreement and the loss of the franchisee's investment. The franchisee would not have an opportunity to correct the issue, as the termination is effective immediately upon notice.
This type of clause is relatively standard in franchise agreements, as franchisors need to protect their brand and reputation. However, it underscores the need for franchisees to understand all aspects of the agreement and to operate their business in a manner that avoids any potential legal or ethical issues that could trigger such a termination clause. Bonchon franchisees should ensure they, their employees, and any affiliated parties maintain the highest standards of conduct to safeguard their investment and business operations.