Which section in the Bonchon Franchise Agreement addresses termination?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement* | Summary |
|---|---|---|
| Bonchon Businesses during a period beginning on the date you receive | ||
| from us a written notice of default and ending on the date the default is | ||
| cured. (Subject to state law.) | ||
| h. "Cause" defined - non-curable defaults | Sections 17.01 and 17.02 | Automatic, without notice: bankruptcy, insolvency, receivership, dissolution, liquidation, foreclosure or levy. On notice to you: a. You fail to open the franchised Restaurant within 300 days following our signing of the Franchise Agreement or cease to operate the Business, abandon the franchise, or, fail to operate your Restaurant for two consecutive days during which you are required to operate, unless due to causes beyond your control. b. You omitted or misrepresented a material fact in information you furnished us in connection with our decision to sign the Franchise Agreement. |
| c. You and we agree in writing to terminate. | ||
| d. You do not secure a Restaurant Location within the required time | ||
| limits and procedures. | ||
| e. You lose the right to possess the Restaurant Location, but if the loss | ||
| is due to no fault of yours, you may apply for approval to relocate and | ||
| reconstruct. | ||
| f. You, your Operating Principal, General Manager, and/or Area Manger | ||
| and all other required to do so fail to attend or successfully complete | ||
| our Initial Training Program or Partner Training Program (as applicable). | ||
| g. | ||
| You, your Operating Principal, your General Manager and/or | ||
| Manager if you are a business entity, any owner, member, shareholder, | ||
| director or manager of yours is convicted of a felony, etc. | ||
| h. You make an unauthorized transfer. | ||
| i. You do not comply with the in-term covenant not to compete, or obtain | ||
| the required additional covenants, or you violate the restrictions | ||
| pertaining to the use of Confidential Information. | ||
| j. Before you open, we determine that you, your Operating Principal, | ||
| General Manager and/or | ||
| Manager failed to attend or successfully | ||
| complete the Initial Training Program or Partner Training Program (as | ||
| applicable). | ||
| k. You knowingly or through gross negligence conceal revenues; | ||
| knowingly maintain false books or records; falsify information or | ||
| otherwise defraud or make false representations to us; or submit any | ||
| false report to us. | ||
| l. You do not maintain the required financial records. | ||
| m. An audit shows that you understated your Gross Revenues by 5% | ||
| or more for any week or for the entire period of examination. | ||
| n. An audit shows that during a 36 week period, you submitted three | ||
| or more weekly reports or statements that understated your Gross | ||
| Revenues by 2% or more for any three weeks within the period of | ||
| examination, or for the entire period of examination. | ||
| o. You refuse us permission to inspect or audit. | ||
| p. You take any funds withheld from your employees' wages which | ||
| should have been set aside for the franchised Business' employee | ||
| taxes, FICA, insurance or benefits; wrongfully take our property; | ||
| systemically fail to deal fairly with your employees, customers or | ||
| suppliers; or knowingly permit or, having discovered the facts, fail to | ||
| take any action against or to discharge any agent, servant or employee | ||
| who has embezzled. | ||
| q. After curing a default which is subject to cure, you commit the same | ||
| act of default again within 6 months. | ||
| r. You make a willful misrepresentation or do not make a material | ||
| disclosure required by any governmental authority regarding any | ||
| matter involving your franchised Business and Restaurant. | ||
| s. You interfere or attempt to interfere with our | ||
| or our affiliates' | ||
| contractual relations and/or relationships with others. |
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, Section 17.01 and 17.02 of the Franchise Agreement define "cause" for termination relating to non-curable defaults. These sections outline specific events that trigger automatic termination without notice, such as bankruptcy, insolvency, receivership, dissolution, liquidation, foreclosure, or levy.
Additionally, Bonchon may provide a notice of termination for other causes. These include failing to open the restaurant within 300 days, ceasing operations, misrepresenting information, failing to secure a restaurant location, losing possession of the location (under certain conditions), failing to complete required training programs, or the conviction of a felony by key personnel. Further causes for termination include unauthorized transfers, violations of non-compete covenants or confidentiality, concealing revenues, falsifying records, understating gross revenues by specified percentages, refusing inspections, mishandling employee funds, or committing repeated defaults.
These termination clauses are typical in franchise agreements to protect Bonchon's brand and ensure franchisees adhere to operational standards and legal requirements. Prospective franchisees should carefully review these sections with legal counsel to understand their obligations and the potential consequences of non-compliance, as these clauses can significantly impact their investment and business operations.