If a Bonchon franchisee defaults or terminates through failure to pay, what must the franchisee pay to Bonchon?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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.
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.
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 due to the franchisee's default or failure to make payments after receiving notice and an opportunity to resolve the issue, the franchisee is obligated to cover all losses and expenses incurred by Bonchon as a result of the default or termination. These expenses encompass all damages, costs, reasonable attorneys' and experts' fees, both directly and indirectly related to the termination. Examples of such costs include lost profits, lost business opportunities, damage to Bonchon's proprietary marks and reputation, travel and personnel costs, and the expense of securing a new business at or near the restaurant location. This financial obligation creates a lien in Bonchon's favor against the franchisee's assets, property, furnishings, equipment, signs, fixtures, and inventory, as well as any money held by Bonchon.
Bonchon may opt to seek actual damages if they can precisely determine and quantify the losses suffered due to the franchisee's uncured default or premature termination of the agreement, instead of seeking liquidated damages.
In the event of termination, the franchisee must immediately pay all outstanding royalties, fees, and other sums owed to Bonchon or its affiliates, including interest, as well as any amounts owed to landlords, suppliers, employees, taxing authorities, advertising agencies, lenders, and other third parties. This comprehensive financial responsibility ensures that Bonchon is compensated for the financial repercussions of a franchisee's default or failure to pay, protecting the brand and its financial interests.