Does Bonchon require written permission before a franchisee can pledge the Franchise Agreement?

According to Bonchon's 2025 Franchise Disclosure Document, franchisees need prior written consent from Bonchon to permit any mortgage, lien, pledge, or other security interest in respect of any of the business entity's shares, equity interests, or other ownership interests. A violation of this restriction gives Bonchon the right to terminate the Franchise Agreement immediately upon notice. This requirement ensures that Bonchon maintains control over who has a financial stake in its franchises.

This stipulation is significant for prospective franchisees because it limits their ability to use their ownership in the Bonchon franchise as collateral for financing without Bonchon's explicit approval. This could affect a franchisee's ability to secure loans or investments using their franchise equity. Bonchon's consent cannot be unreasonably withheld, delayed, or conditioned.

This level of control is relatively common in franchising, as franchisors want to protect their brand and ensure that franchisees are financially stable and committed to the business. However, it's crucial for franchisees to understand these restrictions and factor them into their financial planning. Franchisees should discuss with Bonchon under what circumstances such consent would be granted or denied to fully understand the implications.