Must the proposed assignee of a Bonchon franchise comply with Bonchon's restrictions regarding involvement in businesses that compete with the franchised Bonchon business?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
That the proposed assignee and/or his, her or its proposed Operating Principal attend and receive certification in safe food handling from a state-approved food safety program and attend and successfully complete our Initial Training Program or Partner Training Program (as applicable) before the assignment, and any other training that we reasonably require, at the assignee's expense (which will include our then-current training fee and the cost of the trainee's transportation, lodging, food and other living expenses).
Each individual undergoing such training must first execute the Confidentiality/Non-Competition Agreement substantially in the form of Exhibit E.
We may waive these requirements if the proposed assignee is one of our existing franchisees in good standing.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a proposed assignee must adhere to Bonchon's restrictions concerning involvement in businesses that compete with the franchised Bonchon business. Specifically, each individual undergoing training, which is a prerequisite for assignment, must execute a Confidentiality/Non-Competition Agreement. This agreement is substantially in the form of Exhibit E.
This requirement ensures that any party taking over a Bonchon franchise is legally bound to not engage in competitive activities that could harm the Bonchon brand. The execution of this agreement is a condition Bonchon may impose when granting consent to the assignment and sale of a franchise. Bonchon may waive the training and Confidentiality/Non-Competition Agreement if the proposed assignee is an existing franchisee in good standing.
For a prospective franchisee, this means that if they plan to sell their franchise in the future, the potential buyer will need to agree to these non-competition terms. This could potentially limit the pool of eligible buyers to those who are not currently involved in similar businesses or are willing to cease such activities. It also protects Bonchon by preventing franchisees from gaining knowledge and experience within the Bonchon system and then using it to benefit a competing business.