What are the potential consequences for a Bonchon franchisee if they fail to comply with the franchisor's requirements regarding the use of Proprietary Marks (Item 13), and how does this relate to the protection of the brand's reputation?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree that the Proprietary Marks are our (or our affiliates') valid, exclusive and sole property. You assert and will in the future assert no claim to any goodwill, reputation or ownership of the Proprietary Marks by virtue of your licensed use of the Proprietary Marks, or for any other reason. You agree that you will not do or permit any act or thing to be done in derogation of any of our rights or the rights of our affiliates in connection with the Proprietary Marks, either during or after the term
If you are a Business Entity, you may not use our Proprietary Marks or any confusingly similar words or symbols, in your entity name. In particular, you may not use the words "Bonchon," "Bonchon Franchise LLC," or any variant as part of your Business Entity name.
You shall require all of your advertising, promotional materials, signs, decorations, paper goods (including disposable food containers, napkins, menus, and all forms and stationery used in or by your franchised Business), and all other items we may designate, to feature and bear the Proprietary Marks in the form, color, location and manner we prescribe.
You must conduct your franchised Bonchon Business under the assumed business name "Bonchon". You agree, at your expense, to perform all filings and procure all required or necessary government approvals or registrations required to do business under that assumed business name and to furnish to us copies of all such filings, approvals and registrations. You must never identify yourself as an agent of ours. You must conspicuously identify yourself, your franchised Business and your Bonchon Restaurant in all dealings with your customers, contractors, suppliers, public officials and members of the public, and in all advertising, promotion and marketing related to your Business, as our independently owned and operated franchisee. You agree to place this notice of independent ownership in your Restaurant and any other facilities of the franchised Business, printed materials, business cards, stationery, marketing and advertising materials, signs and other written or electronic modes that we may specify in such fashion and as we require from time to time, in our Manuals or otherwise and in such fashion as we require from time to time.
You may not use the Proprietary Marks in any way which will incur any obligation or indebtedness on our behalf. You agree to comply with our Manuals' instructions in filing and maintaining all requisite trade name or fictitious name registrations, and in executing any documents considered necessary by us or our counsel to obtain protection for the Proprietary Marks or to maintain their continued validity and enforceability.
- C. You agree to affix our Proprietary Marks on the facilities of your franchised Bonchon Business, including your Bonchon Restaurant, your franchised Business's point-of-sale materials, signs, stationery, advertising, sales, marketing and promotional materials and other objects in the size, color, lettering style and fashion and at the places which we designate in our Manuals or otherwise. You also agree to display the Proprietary Marks and relevant trademark and copyright notices pursuant to the requirements set forth in the Manuals. No trademarks, logotypes, names, symbols or service marks other than the Proprietary Marks may be used by or in connection with your franchised Business in any fashion whatsoever except as we may expressly provide in our Manuals or as we may approve in writing.
You commit any act or default which materially impairs the goodwill associated with our Proprietary Marks and which, by its nature, is incurable; or, if the default is curable, you fail to cure the default following delivery of written notice to cure at least seventytwo hours in advance.
You engage in any business or market any service or product under a name or mark which, in our opinion, is confusingly similar to our Proprietary Marks.
You engage in conduct which reflects materially and unfavorably upon the operation and reputation of the Bonchon Businesses, us or the Bonchon System.
You must comply with any instruction by us to modify or discontinue use of any Proprietary Mark or to adopt or use additional or substituted Proprietary Marks. We have no obligation to reimburse you for any expenditures you make to comply with such instructions. Nor will we be liable to you for any other expenses, losses or damages sustained by you or your franchised Business as a result of any Proprietary Mark addition, modification, substitution or discontinuation.
If you receive notice, are informed or learn of any claim, suit or demand against you on account of any alleged infringement, unfair competition, or similar matter relating to the use of the Proprietary Marks or any of our copyrights (each, a "claim"), you agree to promptly notify us. We will then
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a franchisee's failure to comply with the requirements regarding the use of Proprietary Marks can lead to significant consequences, primarily because the Proprietary Marks represent the brand's identity and goodwill. Bonchon retains sole ownership of its Proprietary Marks, and franchisees must acknowledge this ownership and the validity of the marks. Franchisees must use the Proprietary Marks in the manner prescribed by Bonchon, including on restaurant facilities, point-of-sale materials, signage, and advertising. They are also required to identify themselves as independently owned and operated franchisees in all dealings and marketing materials.
A Bonchon franchisee cannot use the Proprietary Marks in any way that incurs debt on behalf of Bonchon, and they must comply with the operations manual for trade name registrations. They are prohibited from using any trademarks, logotypes, names, or symbols other than the Proprietary Marks unless expressly approved by Bonchon. Franchisees must also notify Bonchon of any claims or suits related to the use of the Proprietary Marks, allowing Bonchon to take necessary action to defend against such claims.
Failure to adhere to these requirements can result in actions that materially impair the goodwill associated with Bonchon's Proprietary Marks, potentially leading to a breach of the franchise agreement. Specifically, engaging in any business or marketing any service or product under a name confusingly similar to Bonchon's Proprietary Marks, or engaging in conduct that reflects unfavorably on the operation and reputation of the Bonchon business, the franchisor, or the Bonchon system, are grounds for concern. Bonchon also has the right to modify or discontinue the use of any Proprietary Mark, and franchisees must comply with these instructions without expecting reimbursement for related expenses. These stipulations underscore the importance Bonchon places on protecting its brand identity and reputation, and the potential repercussions for franchisees who fail to uphold these standards.