If Bonchon terminates the Franchise Agreement because I failed to secure a Restaurant Location in time, will I receive a refund of the Initial Franchise Fee?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
It is of the essence of this Agreement that you select a Restaurant Location and obtain our advance written approval for your Restaurant Location within 90 days following the Effective Date of this Agreement and that you sign a lease approved by us (or provide proof of ownership or an executed contract of sale) for your Restaurant Location within 120 days following the Effective Date of this Agreement. If you will be operating a Remote Kitchen Restaurant, then you must select a Restaurant Location and obtain our advance written approval for your Restaurant Location within 60 days following the Effective Date of this Agreement and that you sign a lease approved by us (or provide proof of ownership or an executed contract of sale) for your Restaurant Location within 90 days following the Effective Date of this Agreement. If you do not secure a Restaurant Location within the time limits and following the procedures specified in this Section 6.01, then this failure will be a material and incurable breach of this Agreement which, unless we waive the breach, will entitle us to terminate this Agreement immediately upon notice to you, with no opportunity to cure. If we terminate the Agreement for this reason, then all funds you paid us will be considered earned by us; we will not refund to you any portion of the Initial Franchise Fee; and you shall immediately execute our then-current form of General Release running in favor of us and our affiliates.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if you fail to secure a Restaurant Location within the specified time limits and procedures, it will be considered a material breach of the Franchise Agreement. If Bonchon terminates the agreement for this reason, you will not receive a refund of any portion of the Initial Franchise Fee. All funds paid will be considered earned by Bonchon.
For a standard Bonchon Restaurant, you must select a location and receive written approval within 90 days of the agreement's effective date. You then have 120 days from the effective date to sign a lease approved by Bonchon or provide proof of ownership. For a Remote Kitchen Restaurant, the deadlines are shorter: 60 days for location selection and approval, and 90 days for signing the lease or providing proof of ownership.
This policy highlights the importance of securing a location promptly. Failing to meet these deadlines can result in the termination of your Franchise Agreement and the loss of your Initial Franchise Fee. Additionally, upon termination, you will be required to execute a General Release in favor of Bonchon and its affiliates, potentially limiting your ability to pursue legal action against them.