Where must litigation be conducted for disputes related to the Bonchon Area Development Agreement?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Section in Area Development Agreement | Summary |
|---|---|---|
| v. Choice of forum | Sections 18.13 and 13.03 | Litigation must be in New York, New York, except that we may bring an action for an injunction in any court with jurisdiction (see Area Development Agreement). (Subject to state law). |
| w. Choice of law | Section 18.12 | New York law applies. Your state law may supersede this provision and it may not be enforceable in your state. (Subject to state law). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 71–81)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, litigation regarding the Area Development Agreement must generally occur in New York, New York. This is according to Sections 18.13 and 13.03 of the Area Development Agreement. However, Bonchon retains the right to pursue injunctive actions in any court that has jurisdiction. This means that while most disputes will be settled in New York courts, Bonchon can seek immediate legal relief, such as an injunction, in a different location if necessary to protect its interests. Franchisees should be aware of this forum selection clause as it dictates where they may need to travel and hire legal representation should a dispute arise.
This requirement to litigate in New York could increase costs for franchisees who do not reside in that area, as they may incur travel and accommodation expenses, as well as potentially higher legal fees if they need to hire New York-based attorneys. While the agreement specifies New York law applies (Section 18.12), the FDD also notes that your state law may supersede this provision and it may not be enforceable in your state.
It is important for prospective Bonchon franchisees to understand these conditions and consider the potential implications before entering into an Area Development Agreement. They should seek legal counsel to fully understand their rights and obligations under the agreement, particularly regarding dispute resolution and choice of law.