In a legal proceeding not brought by Bonchon, what presumption is explicitly avoided by the termination of the action via judgment, order, settlement, conviction, or a plea of nolo contendere?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the termination of a legal action through judgment, order, settlement, conviction, or a plea of nolo contendere does not automatically presume that the person involved acted in bad faith or against the best interests of the corporation. This applies to legal proceedings not initiated by Bonchon itself.
This provision protects individuals associated with Bonchon from being automatically presumed to have acted unlawfully or in bad faith simply because a legal case concludes in a certain way. It ensures that each situation is evaluated on its own merits, without an inherent negative assumption based solely on the outcome of a legal proceeding.
For a prospective Bonchon franchisee, this clause offers a degree of protection. If a franchisee is involved in a legal dispute (not brought by Bonchon) related to their business operations, the resolution of that dispute through settlement, judgment, or similar means will not automatically create a presumption of wrongdoing or bad faith on their part.