Are representations or promises outside of the Bonchon Disclosure Document and Area Development Agreement enforceable?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Section in Area Development Agreement | Summary |
|---|---|---|
| l. Our approval of transfer by you | Section 12.02, 12.03 and 12.04 | No transfer without our consent except as provided in Area Development Agreement (for example, transfer to a business entity you form for convenience). (Subject to state law.) |
| m. Conditions for our | Sections 12.03 | See l., above. |
| approval of transfer | and 12.04 | |
| n. Our right of first | None | Not applicable. |
| refusal to purchase | ||
| your business | ||
| o. Our option to | None | Not applicable |
| purchase your business | ||
| p. Your death or disa- bility | Section 12.04 | On your death or disability (if you are an individual), or the death or disability of your last surviving owner (if you are a business entity), that person’s rights pass to his or her "Estate". The Estate may continue operating the Business if it provides an acceptable Area Business Manager. This Area Business Manager must assume full time operation of the franchise within 90 days of death or disability. (Subject to state law.) |
| q. Non-competition | Section 11.01 | No involvement in competing business anywhere. (Subject to state law.) |
| covenants during the | ||
| term of the franchise | ||
| r. Non-competition covenants after the franchise is terminated or expires | Section 11.01 | No involvement in competing business for 2 years within your Development Territory, within a 20 mile radius of the perimeter of your Development Territory or within a 20 mile radius of the perimeter of (or within) any Bonchon Business (whether company-owned, franchised or otherwise established and operated). (Subject to state law.) |
| s. Modification of the | Section 18.05 | No oral modifications. |
| agreement | ||
| t. Integration/ merger clause | Section 18.05 | Only the terms of the Area Development Agreement, the Exhibits to the Area Development Agreement and all agreements signed with it are enforceable (subject to state law). Any representations or promises outside of the Disclosure Document and franchise agreement may not be enforceable. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 71–81)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the enforceability of representations or promises made outside of the Disclosure Document and Area Development Agreement is limited. Specifically, the FDD states that only the terms within the Area Development Agreement, its exhibits, and any agreements signed alongside it are enforceable. This is subject to state law, which may have its own stipulations.
This provision means that prospective Bonchon franchisees should rely solely on the written agreements and the FDD when making their investment decision. Any verbal promises or assurances from Bonchon representatives that are not documented in these official documents may not be legally binding. This protects both the franchisee and Bonchon by ensuring that all agreed-upon terms are clearly defined and documented.
This type of clause, often referred to as an integration or merger clause, is common in franchise agreements. It aims to prevent disputes based on misunderstandings or undocumented claims. Franchisees should ensure they thoroughly review and understand all terms and conditions outlined in the Bonchon Disclosure Document and Area Development Agreement before signing, as these documents will govern the franchise relationship. If there are specific promises or representations that a potential franchisee finds important, they should seek to have them included in the written agreements to ensure enforceability.