What are the potential consequences for a Bonchon franchisee if they fail to disclose their location in a High-Risk Jurisdiction?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
You omitted or misrepresented any
material fact in connection with obtaining this Franchise Agreement or in connection with the Bonchon Business.
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- You are declared insolvent or bankrupt; a receiver or other custodian is appointed for all or a substantial part of your assets; you make an assignment for the benefit of creditors; or, your interest in this Agreement or in the franchised Business is levied on or attached; or, a judgment in excess of $50,000 is entered against you and is not dismissed or settled by the earlier of (i) thirty (30) days from commencement or (ii) consummation of such sale; or, if you are a business entity, your governing body adopts any resolution or otherwise authorizes action to approve any of the foregoing activities.
17.02 Termination By Us Upon Notice – No Opportunity To Cure
You will have materially breached this Agreement and we may, at our option, terminate this Agreement and all rights granted under this Agreement, without giving you any opportunity to cure the breach, effective immediately upon your receipt of notice (which, whether sent by certified mail, registered mail, overnight courier or personal physical delivery, will be deemed to have been received by you upon delivery or first attempted delivery of the notice to you) upon the occurrence of any of the following events:
You do not open your Bonchon Restaurant for business within 300 days after the Effective Date of this Agreement or on or before the Scheduled Opening Date, whichever is earlier; cease operating the franchised Business; abandon the franchise relationship established under this Agreement; or, fail to operate your Bonchon Restaurant for two consecutive days, or three individual days within a twelve month period, during which you are required to operate it under this Agreement, unless your failure to operate is due to force majeure (as defined in Section 20.01).
You omitted or misrepresented any
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
Based on the 2025 Bonchon Franchise Disclosure Document, if a franchisee fails to make a material disclosure required by any governmental authority regarding any matter involving or affecting the operations of the Bonchon business, this could lead to termination of the franchise agreement. This includes failing to disclose a location in a High-Risk Jurisdiction if such disclosure is required.
Specifically, Item 17.02 outlines conditions under which Bonchon can terminate the agreement without allowing the franchisee an opportunity to cure the breach. One of these conditions is omitting or misrepresenting any information in connection with obtaining the Franchise Agreement or in connection with the Bonchon business. This suggests that failure to disclose a location in a High-Risk Jurisdiction, if considered a material misrepresentation or omission, could result in immediate termination.
Item 17.03 describes instances where Bonchon must provide fifteen days to cure a breach. One of these instances is if the franchisee makes a willful misrepresentation or does not make a material disclosure required by any governmental authority regarding any matter involving or affecting the operations of the franchised Bonchon Business and Restaurant. Therefore, if the failure to disclose the High-Risk Jurisdiction location falls under this category, the franchisee would have fifteen days to correct the issue before Bonchon could terminate the agreement.
It is important for prospective Bonchon franchisees to understand what constitutes a "High-Risk Jurisdiction" and what disclosures are required by governmental authorities. Franchisees should consult with legal counsel to ensure full compliance with all disclosure requirements to avoid potential termination of their franchise agreement.