Which section of the Bonchon Franchise Agreement covers the topic of dispute resolution?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement* | Summary |
|---|---|---|
| u. Dispute resolution | N/A | No provision for arbitration or mediation. |
| by arbitration or | ||
| mediation | ||
| v. Choice of forum | Section 32.04 | Litigation must be in New York, New York, except that we may bring an action for an injunction in any court with jurisdiction (see Franchise Agreement). (Subject to state law.) |
| w. Choice of law | Section 32.03 | New York law applies. Your state law may supersede this provision and it may not be enforceable in your state. (Subject to state law.) |
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, the section of the Franchise Agreement that addresses dispute resolution is not explicitly outlined for arbitration or mediation. However, Section 32.04 covers the choice of forum for litigation, stating that litigation must occur in New York, New York. Bonchon retains the right to pursue injunctive actions in any court with jurisdiction. Section 32.03 specifies that New York law governs the Franchise Agreement; however, the franchisee's state law may supersede this provision.
This means that if a Bonchon franchisee has a dispute with the franchisor, they may be required to litigate the matter in New York, which could increase expenses depending on where the franchisee is located. The franchisee should be aware that while the agreement specifies New York law, their own state's laws could take precedence, potentially altering the legal landscape of any dispute.
Many franchise agreements include mandatory arbitration clauses to resolve disputes outside of court, which can sometimes be a more cost-effective and quicker process. The Bonchon franchise agreement does not include this, so any dispute would likely be resolved through the court system. Prospective franchisees should seek legal counsel to fully understand the implications of these provisions and how they might affect their rights and obligations under the Franchise Agreement.