Is the Landlord required to accept a substitute tenant designated by Bonchon under the lease?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
--|---|---|---|---|---|---| and such other and further Proprietary Marks (as defined in Section 1.01 of the Franchise Agreement) that we may from time to time license to you in conjunction with and addition to the Proprietary Marks listed above. Any such other and further Proprietary Marks will be deemed a part of this Exhibit B.
EXHIBIT C TO BONCHON FRANCHISE AGREEMENT REQUIRED LEASE RIDER
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- Reference is made to the Franchise Agreement (the "Franchise Agreement"), dated _______, 20__, between Tenant and Bonchon Franchise LLC ("Franchisor"), pursuant to which Tenant is a franchisee of Franchisor. After (a) the expiration of the Franchise Agreement (so long as Franchisor provides the Landlord with no less than 60 days advance written notice thereof), or (b) the sooner termination of the Franchise Agreement for any reason (so long as Franchisor either provides the Landlord with (x) a copy of Franchisor's notice of termination to Franchisee or (y) an agreement regarding the date of termination), Franchisor will have the right (but not the obligation) to cure any defaults within a reasonable period of time and at Franchisor's election, either to assume the obligations of and replace Tenant as the lessee under the Lease, or to have another franchisee, licensee, joint venture partner or other designee of Franchisor's assume the obligations of and replace Tenant as the lessee under the Lease.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, under certain conditions, the landlord may be required to accept a substitute tenant designated by Bonchon. Specifically, after the expiration or termination of the Franchise Agreement, Bonchon has the right, but not the obligation, to cure any defaults and either assume the lease or designate another franchisee, licensee, joint venture partner, or other designee to assume the lease.
To ensure Bonchon has this right, Bonchon requires that any lease or sublease for the Restaurant Location be accompanied by a rider substantially in the form of Exhibit C. This rider includes provisions that allow Bonchon or its designee to take over the lease under certain circumstances. The landlord must also provide Bonchon with written notice of any default or termination of the lease simultaneously with giving notice to the tenant (the franchisee).
This provision protects Bonchon's interests by allowing them to maintain control over the location and continue operations, if desired, even if the original franchisee defaults or the agreement is terminated. For a prospective franchisee, this means that the lease agreement must include specific language (Exhibit C rider) that allows Bonchon to step in and assign the lease to another operator. This could impact the franchisee if they plan to sell the business or assign the lease independently, as Bonchon's rights take precedence.