Which section in the Bonchon Franchise Agreement addresses the franchise relationship?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
resolution. You should read these provisions in the agreements attached to this Disclosure Document.
Franchise Agreement *
| Provision | Section in Franchise Agreement* | Summary | |---|---|---| | a. Length of the franchise term | Section 4.01 | Term of Franchise Agreement will commence on the effective date and expire 10 years from the day your Bonchon Restaurant commences operations. | | b. Renewal or exten- sion of the term | Section 4.02, 13.01 | You can enter into two consecutive Successor Franchise Agreements for a term of five years each if you comply with the conditions for a Successor Term. |
| 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. |
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, Item 17 addresses various provisions within the Franchise Agreement that define the franchise relationship. The table provides a summary of key aspects of the franchise agreement and refers to specific sections within the agreement that detail these provisions. These provisions include the length and renewal terms, conditions for transfer, rights of first refusal or options for Bonchon to purchase the business, what happens in the event of death or disability, non-competition covenants, modification and integration clauses, dispute resolution, and choice of law.
For example, the length of the franchise term is detailed in Section 4.01 of the Franchise Agreement, stating that the term commences on the effective date and expires 10 years from the day the Bonchon Restaurant commences operations. Furthermore, Sections 4.02 and 13.01 outline the conditions under which a franchisee can enter into two consecutive Successor Franchise Agreements, each for a term of five years. These sections collectively define the duration and potential extensions of the franchise relationship.
Other sections cover what happens when the franchisee wants to transfer ownership, or in the event of death or disability. Sections 12.02 of the Franchise Agreement outline non-competition covenants during and after the franchise term, restricting involvement in competing businesses. Sections 7.01 and 27.01 state that the Franchise Agreement generally does not allow for oral modifications, but Bonchon may change the manuals, provided these changes do not conflict with or materially alter the franchisee's rights and obligations. Finally, Sections 32.03 and 32.04 dictate that New York law applies and litigation must occur in New York, although the franchisee's state law may supersede these provisions.