Which section of the Bonchon Franchise Agreement covers the topic of transfer?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
t contract. | | | | s. | | | | You must arrange an inspection of the Bonchon Restaurant prior to |
| Provision | Section in Franchise Agreement* | Summary |
|---|---|---|
| the transfer and pay our On-site Inspection Upon Transfer Fee. Either you or the transferee must, at your/its expense, upgrade the Bonchon Restaurant to conform with then-current standards and specifications within the time we reasonably specify. t. You must pay us a transfer fee of $15,000 or such greater amount as is necessary to reimburse us for our reasonable costs and expenses associated with the application for transfer. Notwithstanding the foregoing, there will be no transfer fee if the assignee is a member of your immediate family. \nu. You must correct any existing deficiencies of the Restaurant of which we have notified you. (Subject to state law.) | ||
| n. Our right of first | Section 14.06 | We can match any offer for your Business. (Subject to state law.) |
| refusal to purchase | ||
| your business | ||
| o. Our option to purchase your business | Section 19.01 | We have the option to buy your franchised Business's assets upon termination or expiration. (Subject to state law.) |
| p. Your death or disability | Section 14.05 | On your death or disability your rights pass to your "Estate". Your Estate may continue operating the Business if it provides an acceptable Operating Principal and General Manager. This Operating Principal must successfully complete our next Initial Training Program or Partner Training Program (as applicable) and assume full-time operation of the franchise within 1 month of your death or disability. From the date of your death or disability until an Operating Principal assumes full time control, we can operate your Business, but need not do so. See Item 6. Or, the Estate may sell the franchise in accordance with the requirements described in m. above. |
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 provisions related to transfer of the franchise are primarily detailed in Section 14.06 of the Franchise Agreement. This section outlines Bonchon's right of first refusal to purchase the business, meaning Bonchon has the opportunity to match any offer a franchisee receives from a potential buyer. This is a common clause in franchise agreements, allowing the franchisor to maintain control over who joins their system.
Additionally, the document specifies conditions related to transfer, including the payment of a $15,000 transfer fee (or a greater amount to cover reasonable costs) and upgrading the Bonchon Restaurant to current standards. However, the transfer fee is waived if the assignee is an immediate family member. The franchisee must also correct any existing deficiencies of the Restaurant of which Bonchon has notified them.
In the event of death or disability, Section 14.05 dictates that the franchisee's rights pass to their Estate. The Estate can continue operating the Bonchon business if they provide an acceptable Operating Principal and General Manager who complete Bonchon's training program within one month. Alternatively, the Estate can sell the franchise, subject to the transfer requirements mentioned earlier. These provisions ensure business continuity and adherence to Bonchon's standards even in unforeseen circumstances.