If more than two individuals serve as the franchisee for a Bonchon franchise, what ownership interest requirements apply to the new entity?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. If more than two individuals serve as "Franchisee" hereunder, each individual involved in the new entity must have the same proportionate ownership interest in the new entity as he or she had in the franchised Business before the assignment.
- D. You and the business entity must execute an agreement with us under which you and the business entity agreed to be jointly and severally liable for all duties, responsibilities and obligations to us under this Agreement and expressly agree to be bound by all of the terms, conditions and covenants of this Agreement. Each then-current and future owner of any interest in the business entity must agree in writing to personally guarantee the performance by the business entity of your obligations under this Agreement, and to be individually bound by all of the terms and conditions of this Agreement and any other agreements between you and us, in the form of Exhibit H to this Agreement.
- E. Each present and future owner of any interest in the business entity must execute our Confidentiality/Non-Competition Agreement in the form of Exhibit E to this Agreement.
- F. The name of the business entity formed by you may not include the Proprietary Mark "Bonchon", any variant thereof or any word confusingly similar thereto.
- G. All of your business entity's organizational documents and evidence of ownership interests (such as stock certificates) must state that the issuance and transfer of any interest in the business entity are restricted by the terms of this Agreement and subject to our prior written consent.
- H. Your business entity must comply in all respects with the requirements and prohibitions set forth in Section 8.18 of this Agreement ("Business Entity Requirements and Records").
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if more than two individuals are franchisees, each individual must maintain the same proportionate ownership interest in the new business entity as they held in the franchised business before the assignment. This ensures that the ownership structure remains consistent during the transition to a new entity.
Additionally, both the franchisee and the new business entity must sign an agreement with Bonchon, accepting joint and several liability for all obligations under the Franchise Agreement. This means that both the original franchisee and the new entity are responsible for fulfilling the terms of the agreement. Each current and future owner of any interest in the business entity must also personally guarantee the performance of the business entity's obligations and agree to be individually bound by the terms of the agreement.
Furthermore, each present and future owner must execute Bonchon's Confidentiality/Non-Competition Agreement. The name of the new business entity cannot include "Bonchon" or any confusingly similar variations. All organizational documents and evidence of ownership must state that the issuance and transfer of any interest in the business entity are restricted by the terms of the Franchise Agreement and are subject to Bonchon's prior written consent. The business entity must also comply with the requirements and prohibitions set forth in Section 8.18 of the Franchise Agreement, which covers business entity requirements and records.