Does Bonchon's power to purchase insurance for its personnel extend to liabilities incurred due to their status, regardless of whether Bonchon could indemnify them under its bylaws?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
x" dollars for every "x" dollar amount the customer spends in gift card purchases). You may not offer any coupon without our prior written approval. You are required to use our designated gift card service provider and gift card supplies vendor as a condition of participating in our gift card program.
9. INSURANCE
9.01 Your Required Insurance Coverage
- A. Within ten days following our execution of this Agreement, and thereafter at all times throughout the term of this Agreement, you agree to purchase at your own expense, and maintain in effect at all times, the following categories of insurance coverage in forms and through insurance companies satisfactory to us:
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- Broad form comprehensive general liability coverage, and broad form contractual liability coverage of at least $2,000,000 aggregate and at least $1,000,000 per occurrence. This insurance may not have a deductible or selfinsured retention of over $5,000.
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- Special cause of loss coverage forms (sometimes called "All Risk Coverage") on your Bonchon Restaurant and all fixtures, equipment, supplies and other property used in the operation of the Restaurant, for full repair and replacement value of the machinery, equipment and improvements, including full coverage for loss of income resulting from damage to the Restaurant.
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- Dram Shop Liquor Liability Insurance with limits not less than $1,000,000 per occurrence and in the aggregate.
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- Business interruption insurance in sufficient amounts to cover your Bonchon Restaurant rental expenses, maintenance of competent personnel and other fixed expenses (including payment of Continuing Royalties to us) for a minimum of 12 months loss of income.
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- If any vehicle is operated in connection with the Business, automobile liability insurance with a combined single limit of
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Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
Based on the 2025 Bonchon Franchise Disclosure Document, the document outlines the franchisee's responsibilities regarding insurance coverage, but it does not explicitly state whether Bonchon has the power to purchase insurance for its personnel to cover liabilities, especially in situations where Bonchon might not be able to provide indemnification under its bylaws. The FDD details the types and amounts of insurance coverage the franchisee must maintain, including general liability, property, liquor liability, business interruption, auto liability, and worker's compensation insurance.
Item 23 of the FDD specifies the franchisee's required insurance coverage, including broad form comprehensive general liability coverage of at least $2,000,000 aggregate and at least $1,000,000 per occurrence. It also requires insurance coverage sufficient to satisfy the franchisee's indemnification obligations, potentially including coverage for claims alleging violations of labor laws. However, these requirements focus on the franchisee's obligations to protect Bonchon and related parties.
To fully understand Bonchon's ability to purchase insurance for its personnel and the extent of that coverage, a prospective franchisee should seek clarification from Bonchon regarding its policies on insuring its personnel against liabilities and how those policies interact with the indemnification provisions in the franchise agreement. This information is crucial for assessing the overall risk and protection afforded to both the franchisee and Bonchon's personnel.