Does the Bonchon indemnification clause apply to claims arising from the design, construction, or remodeling of the Bonchon Restaurant, even if Bonchon approved the work?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
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)
According to Bonchon's 2025 Franchise Disclosure Document, the franchisee's indemnification obligations extend to liabilities arising from the design, construction, conversion, build-out, outfitting, remodeling, renovation, or upgrading of the Bonchon Restaurant, regardless of whether Bonchon approved the work. This means that even if Bonchon reviews and approves the franchisee's plans or modifications, the franchisee remains responsible for defending and holding Bonchon harmless from any claims, losses, liabilities, and costs related to these activities. This includes, but is not limited to, personal injury, property damage, or any defects in the restaurant's construction or operation.
This indemnification requirement places a significant responsibility on the franchisee. It means that even if Bonchon provides guidance or approves certain aspects of the restaurant's development, the franchisee bears the ultimate risk for any issues that arise. This is a common practice in franchising, where the franchisee typically assumes responsibility for the day-to-day operations and any liabilities associated with them. However, the breadth of this clause, which includes even Bonchon-approved work, is something a prospective franchisee should carefully consider.
Bonchon's FDD also states that their approval of the franchisee's final plans does not make them liable for any defects, neglects, omissions, errors, or negligence associated with such plans. This reinforces the franchisee's responsibility to ensure the design and construction of the restaurant are sound and compliant with all applicable regulations. The franchisee is required to obtain certifications from their architect and general contractor confirming compliance with the ADA and other relevant laws before opening the restaurant.
In practical terms, this means a Bonchon franchisee needs to exercise extreme diligence in selecting contractors, overseeing construction, and ensuring compliance with all applicable laws and regulations. They should also secure adequate insurance coverage to protect against potential claims. The franchisee should consult with legal and insurance professionals to fully understand the implications of this indemnification clause and to mitigate their risks.