Does Bonchon require approval for the transfer of an Area Development Agreement?
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 |
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, Bonchon requires approval for the transfer of an Area Development Agreement. Specifically, the FDD states that no transfer can occur without Bonchon's consent, although there are exceptions outlined in the Area Development Agreement, such as transferring to a business entity formed for convenience. This requirement is subject to state law.
This means that if a Bonchon area developer wishes to sell or transfer their rights to another party, they must first obtain Bonchon's approval. This provision allows Bonchon to maintain control over who becomes an area developer and ensures that any new developer meets their standards.
It is important for prospective Bonchon franchisees to carefully review Sections 12.02, 12.03, and 12.04 of the Area Development Agreement to understand the specific conditions under which a transfer may be approved or denied. Understanding these conditions is crucial for planning any future exit strategy or business restructuring.