Does the Bonchon indemnification clause cover claims arising from a franchisee's violation of a contract?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
management, employees, agents, servants, contractors, partners, proprietors, affiliates or representatives of you and/or the franchised Business and/or Restaurant (or any third party acting on your behalf or at your direction), whether in connection with the franchised Business, the Restaurant or otherwise, including (without limitation) any property damage, injury or death suffered or caused by any vehicle serving your franchised Business; any claim, however and wherever asserted, that we or our affiliates are the employer, joint employer or co-employer of you and/or your employees (including, without limitation, any claims against us for your violation of any federal, local or state labor and/or wage and hour laws, rules or regulations); third party claims against us arising from or related to your breach of the terms, restrictions and requirements of this Agreement (including, without limitation, your unauthorized use of the Proprietary Marks, violation of any applicable laws, codes, rules or regulations or failure to comply with Privacy Laws); your violation of Privacy Laws; all activities, conduct and representations which you may engage in connected to any actual or attempted assignment (as defined in Section 14.02) of any interest whatsoever in you or the franchised Restaurant or Business (or any entity which controls (as defined in Section 14.02) you or the franchised Restaurant or Business);all liabilities arising from or related to your offer and/or sale of products and/or services as contemplated by this Agreement; and, any action by any customer of yours or visitor to your Bonchon Restaurant or any other facility of your franchised Business (collectively, an "Indemnification Claim").
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the indemnification clause does cover claims arising from a franchisee's violation of a contract. Specifically, Bonchon requires franchisees to indemnify them against third-party claims that arise from or are related to the franchisee's breach of the terms, restrictions, and requirements outlined in the Franchise Agreement. This includes, but is not limited to, the unauthorized use of Bonchon's proprietary marks, violations of applicable laws, codes, rules, or regulations, and failure to comply with privacy laws.
This means that if a Bonchon franchisee violates the Franchise Agreement and this violation leads to a third-party claim against Bonchon, the franchisee is responsible for defending and holding Bonchon harmless from all associated claims, losses, liabilities, and costs. This indemnification obligation extends to judicial, administrative, or arbitration actions, as well as any settlements. The franchisee is responsible for covering all costs associated with these claims, including legal fees and settlement amounts.
For a prospective Bonchon franchisee, this highlights the importance of fully understanding and adhering to the terms of the Franchise Agreement. Failure to comply with the agreement can result in significant financial liabilities if Bonchon faces claims as a result of the franchisee's breach. This is a fairly standard clause in franchise agreements, intended to protect the franchisor from liabilities caused by the franchisee's actions or inactions. Franchisees should consult with legal counsel to fully understand the scope of their indemnification obligations.