Is Bonchon obligated to assume the Tenant's rights and responsibilities 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, Bonchon is not obligated to assume the tenant's rights and responsibilities under the lease unless certain conditions are met. Specifically, after the expiration or termination of the Franchise Agreement, Bonchon has the right, but not the obligation, to either assume the obligations of the tenant as the lessee or to have another franchisee or designee do so. This is contingent upon Bonchon providing the landlord with advance written notice of at least 60 days if the agreement expires, or providing a copy of the termination notice or an agreement regarding the termination date if the agreement is terminated sooner.
If Bonchon does assume the lease and subsequently reassigns it to another franchisee or designee, Bonchon will be released from all future obligations as the lessee upon such reassignment. This arrangement is outlined in a rider to the lease, which also states that neither Bonchon nor its designee will be a party to the lease or have any liability unless the lease is assigned to and assumed by them.
This clause protects Bonchon from being automatically liable for the lease obligations of its franchisees. It provides Bonchon with the flexibility to step in and take over a lease if a franchisee defaults or leaves the system, but it does not mandate that Bonchon do so. For a prospective franchisee, this means that Bonchon's involvement in the lease is conditional and not guaranteed, and the franchisee remains primarily responsible for fulfilling the lease terms unless Bonchon chooses to intervene. The franchisee should carefully review the lease agreement and rider to understand their obligations and Bonchon's rights in case of default or termination.