For how long after the Bonchon franchise is terminated or expires is the franchisee prohibited from involvement in a competing business?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement* | Summary |
|---|---|---|
| the transfer and pay our On-site Inspection Upon Transfer Fee. Either you or the transferee must, at your/its expense, upgrade the Bonchon Restaurant to conform with then-current standards and specifications within the time we reasonably specify. t. You must pay us a transfer fee of $15,000 or such greater amount as is necessary to reimburse us for our reasonable costs and expenses associated with the application for transfer. Notwithstanding the foregoing, there will be no transfer fee if the assignee is a member of your immediate family. \nu. You must correct any existing deficiencies of the Restaurant of which we have notified you. (Subject to state law.) | ||
| n. Our right of first | Section 14.06 | We can match any offer for your Business. (Subject to state law.) |
| refusal to purchase | ||
| your business | ||
| o. Our option to purchase your business | Section 19.01 | We have the option to buy your franchised Business's assets upon termination or expiration. (Subject to state law.) |
| p. Your death or disability | Section 14.05 | On your death or disability your rights pass to your "Estate". Your Estate may continue operating the Business if it provides an acceptable Operating Principal and General Manager. This Operating Principal must successfully complete our next Initial Training Program or Partner Training Program (as applicable) and assume full-time operation of the franchise within 1 month of your death or disability. From the date of your death or disability until an Operating Principal assumes full time control, we can operate your Business, but need not do so. See Item 6. Or, the Estate may sell the franchise in accordance with the requirements described in m. above. (Subject to state law.) |
|
Sections 12.02 | No involvement in competing business anywhere in U.S. (Subject to state law.) |
| covenants during the | ||
| term of the franchise | ||
| r. Non-competition | Section 12.02 | No competing business for 2 years within 20 miles of your Restaurant Location, or within 20 miles of any other franchised or company-owned Bonchon Business. (Subject to state law.) |
| covenants after the | ||
| franchise is terminated | ||
| or expires |
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, if the franchise is terminated or expires, franchisees are restricted from involvement in a competing business for a period of 2 years. This non-compete clause applies within 20 miles of the franchisee's Restaurant Location, or within 20 miles of any other franchised or company-owned Bonchon Business. This restriction is subject to state law, which may impact its enforceability.
This means that after a Bonchon franchise ends, the former franchisee cannot operate or be involved in a similar restaurant within the specified geographic area for two years. This measure aims to protect Bonchon's market share and brand recognition by preventing former franchisees from using their knowledge of the Bonchon system to directly compete.
For a prospective franchisee, this non-compete agreement is a significant consideration. It limits their options post-franchise, potentially requiring them to relocate or pursue a different line of work if they wish to stay in the restaurant industry. Franchisees should seek legal counsel to understand the specific enforceability of the non-compete clause in their state, as state laws vary considerably on this issue. Understanding these restrictions is crucial for planning their long-term career and business strategies.