If renewing or transferring a Bonchon franchise, what document are franchisees required to sign, and what rights does California Corporations Code Section 31512 protect against waiver?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
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- You must sign a general release of claims if you renew or transfer your franchise. California Corporations Code Section 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code Sections 31000 through 31516). Business and Professions Code Section 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code Sections 20000 through 20043).
I.
You (and if you are a business entity, your owners) must have signed our then-current form of General Release.
This General Release will not release us, from any future claims related to any Successor Franchise Agreement but will release us, our affiliates, and our respective officers, directors, shareholders, partners, members, agents, representatives, independent contractors, servants and employees, past and present, in their corporate and individual capacities from any and all claims you may have related to this Agreement or under federal, state or local laws, rules, regulations or orders; and,
- H.
That the assignee executes a new Bonchon Franchise Agreement, and all other agreements required of new franchisees, in the form and on the terms and conditions we then offer to prospective franchisees, which terms and conditions may vary significantly from this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, franchisees must sign a general release of claims when renewing or transferring their franchise. For renewals, the franchisee (and their owners, if the franchisee is a business entity) must sign Bonchon's then-current form of General Release. This release covers claims related to the original agreement but does not release Bonchon from future claims related to any Successor Franchise Agreement. For transfers, the assignee must execute a new Bonchon Franchise Agreement and all other agreements required of new franchisees.
In California, California Corporations Code Section 31512 protects franchisees from waiving their rights under the Franchise Investment Law (California Corporations Code Sections 31000 through 31516). This means any provision in the franchise agreement that requires a franchisee to waive these rights is void and unenforceable. The law also prevents Bonchon from disclaiming representations made to the franchisee or denying the franchisee's ability to rely on those representations, or any violations of the law.
This protection ensures that Bonchon franchisees in California cannot inadvertently or intentionally give up their legal rights under the state's franchise laws. It also ensures that franchisees can rely on the representations made by Bonchon during the franchise sales process. This provision supersedes any other term of any document executed in connection with the franchise.