factual

If a Bonchon franchisee is required to participate in legal action against an infringing party, who is responsible for reimbursing the franchisee's out-of-pocket costs?

Bonchon Franchise · 2025 FDD

Answer from 2025 FDD Document

8.11 Indemnification

You agree that you will, at your sole cost, at all times defend us, any affiliate of ours, the affiliates, subsidiaries, successors, assigns and designees of each; and, the officers, directors, managers, employees, agents, attorneys, shareholders, owners, members, designees and representatives of all of the foregoing (we and all others referenced above being the "Indemnitees"), and indemnify, reimburse and hold harmless us and the Indemnitees to the fullest extent permitted by law, from all claims, losses, liabilities and costs incurred in connection with any judicial, administrative or arbitration action or proceeding (including bankruptcy, insolvency, debtor/creditor or similar proceedings), suit, claim, demand, investigation, or formal or informal inquiry (regardless of whether any of the foregoing is reduced to judgment) or any settlement of the foregoing, which actually or allegedly, directly or indirectly, arises out of, is based upon, is a result of or is related in any way to any element of your entry into this Agreement; your establishment, construction, opening and operation of your Bonchon Restaurant and franchised Business, including any other business operating within or in relation to the Restaurant (which other business, if any, shall be subsumed within this paragraph's references to the Restaurant) and further including (without limitation) any personal, bodily or mental injury, death, property damage or loss, suffered by any customer, visitor, manager, operator, supplier, employee or guest of the franchised Restaurant or Business; crimes committed on or near any of the premises or facilities of your franchised Business or vehicles used by your franchised Business; all acts, errors, neglects or omissions engaged in by you, your contractors or subcontractors, as well as any third party, arising out of or related to the design, construction, conversion, build-out, outfitting, remodeling, renovation or upgrading of your Bonchon Restaurant, whether or not any of the foregoing was approved by us; defects in any Bonchon Restaurant you construct and/or operate, whether or not discoverable by you or by us; all acts, errors, neglects or omissions of you or the franchised Business and/or the owners, officers, directors,

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

What This Means (2025 FDD)

Based on the 2025 Bonchon Franchise Disclosure Document, the document outlines the franchisee's responsibility for covering Bonchon's legal costs in certain situations, but it does not explicitly address who covers the franchisee's costs if they are required to participate in legal action against a third party for infringement.

Item 8.11 discusses the franchisee's duty to indemnify Bonchon and its related parties (Indemnitees) from claims, losses, liabilities, and costs arising from the franchisee's business operations. This includes defending and holding Bonchon harmless in legal proceedings. However, this section focuses on actions against Bonchon, not actions initiated by Bonchon against others where the franchisee's participation is required.

To fully understand the financial responsibilities in the event of infringement litigation, a prospective Bonchon franchisee should seek clarification from the franchisor regarding the specific circumstances under which a franchisee might be required to participate in legal action against an infringing party, and who would bear the associated costs. This information is crucial for assessing the potential financial risks associated with the franchise.

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.