Which section of the Bonchon Franchise Agreement covers the topic of termination?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
weekly Continuing | | | | Royalty rates will be tripled for each and every one of your operating |
| 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. |
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, several sections within the Franchise Agreement address termination-related issues. Section 19.01 discusses Bonchon's option to purchase a franchisee's business assets upon termination or expiration of the franchise agreement. Additionally, Sections 17.01 and 17.02 outline the definition of "cause" for termination, including both curable and non-curable defaults.
Specifically, non-curable defaults that can lead to automatic termination without notice include events like bankruptcy, insolvency, or foreclosure. Other non-curable defaults that trigger termination upon notice from Bonchon include failing to open the restaurant within 300 days, misrepresenting material facts, failing to secure a restaurant location, or failing to complete the required training programs.
Furthermore, franchisees should be aware of actions that, if repeated, can lead to termination. Committing the same curable default again within 6 months after initially curing it can be grounds for termination. Other actions that can lead to termination include concealing revenues, falsifying records, refusing inspections, mishandling employee funds, or interfering with Bonchon's relationships with others.
Finally, Section 12.02 addresses non-competition covenants after the franchise is terminated or expires, restricting involvement in competing businesses for 2 years within 20 miles of the franchisee's Restaurant Location or any other Bonchon Business. These multiple sections highlight the importance of understanding the terms and conditions related to termination within the Bonchon Franchise Agreement.