Is the requirement for franchisees to consent to termination or liquidated damages in Section 16.01 of the Bonchon Area Development Agreement enforced in North Dakota?

According to Bonchon's 2025 Franchise Disclosure Document, Section 16.01 of the Area Development Agreement, which may require franchisees to consent to termination or liquidated damages, is not enforced in North Dakota. Specifically, the North Dakota Addendum to the Area Development Agreement states that this requirement is deleted from all Area Development Agreements used in the State of North Dakota. This means that Bonchon franchisees in North Dakota are not required to consent to termination or liquidated damages as part of their Area Development Agreement.

This modification is outlined in the North Dakota Addendum to the Area Development Agreement, which supersedes any conflicting provisions in the standard Area Development Agreement. The addendum explicitly states that the laws of North Dakota take precedence over any conflicting provisions in the Area Development Agreement or New York law, which typically governs the agreement. This ensures that Bonchon's franchise agreements comply with North Dakota law.

For prospective Bonchon franchisees in North Dakota, this addendum offers a more favorable legal environment by removing the requirement to consent to termination or liquidated damages. This could provide additional protection and legal recourse for franchisees in the event of disputes or termination of the agreement. It is important for potential franchisees to carefully review the North Dakota Addendum along with the standard Area Development Agreement to fully understand their rights and obligations under the franchise agreement.