If a Bonchon franchisee is an entity, what are the requirements for designating an Operating Principal?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are an individual, you must serve as Operating Principal and if you are an entity franchisee, you must designate an individual who either owns a majority interest in the franchised Business or, where there is no majority owner, who we otherwise approve of in writing to serve as your Operating Principal. The Operating Principal, who will have complete decision-making authority with regard to your franchised Bonchon Business and have authority to in all respects act on your behalf, will be the sole individual with whom we will be required to communicate when we seek to communicate with you. You must inform us in writing of your Operating Principal and any replacement Operating Principal in advance. We must approve your Operating Principal before you appoint them. Your Operating Principal must complete the Initial Training Program to our satisfaction, if he or she will have on-site supervision of the Restaurant's daily operations on a full-time basis. If your Operating Principal will not engage in the on-site management of the Restaurant's day-to-day operations on a full-time basis, then your Operating Principal must either attend and successfully complete our Initial Training Program or Partner Training Program. After an Operating Principal's death, disability or termination of employment, you must immediately (but no later than 5 days from the occurrence of such event) notify us, and you must designate a successor or acting Operating Principal within 10 days from the occurrence of such event.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 69–71)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if the franchisee is a business entity, they must designate an individual to serve as the Operating Principal. This individual must either own a majority interest in the franchised business or, if there is no majority owner, be someone approved in writing by Bonchon.
The Operating Principal holds complete decision-making authority regarding the franchised Bonchon business and has the authority to act on behalf of the franchisee in all respects. Bonchon will only communicate with the Operating Principal when they need to communicate with the franchisee. The franchisee must inform Bonchon in writing of the designated Operating Principal and any replacements in advance, and Bonchon must approve the Operating Principal before their appointment.
The Operating Principal's training requirements depend on their role. If the Operating Principal will have on-site supervision of the restaurant's daily operations on a full-time basis, they must complete the Initial Training Program to Bonchon's satisfaction. If they will not engage in on-site management of the restaurant's day-to-day operations full-time, the Operating Principal must either attend and successfully complete Bonchon's Initial Training Program or Partner Training Program. If an Operating Principal dies, becomes disabled, or terminates employment, the franchisee must notify Bonchon immediately (but no later than 5 days from the event) and designate a successor or acting Operating Principal within 10 days of the event.