What is the significance of the 'Effective Date' in relation to a Bonchon franchisee's representation regarding their location and High-Risk status?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
- Representation. Franchisee and its owners each represent and warrant that the information provided in this form is true, accurate and complete and that Bonchon Franchise LLC may consider this statement as continuing to be true, accurate and correct from the Effective Date (as defined below) of this form until a written notice of change in ownership and/or in the Operating Principal status is given by Franchisee, and approved by, Bonchon Franchise LLC.
It is of the essence of this Agreement that you select a Restaurant Location and obtain our advance written approval for your Restaurant Location within 90 days following the Effective Date of this Agreement and that you sign a lease approved by us (or provide proof of ownership or an executed contract of sale) for your Restaurant Location within 120 days following the Effective Date of this Agreement. If you will be operating a Remote Kitchen Restaurant, then you must select a Restaurant Location and obtain our advance written approval for your Restaurant Location within 60 days following the Effective Date of this Agreement and that you sign a lease approved by us (or provide proof of ownership or an executed contract of sale) for your Restaurant Location within 90 days following the Effective Date of this Agreement. If you do not secure a Restaurant Location within the time limits and following the procedures specified in this Section 6.01, then this failure will be a material and incurable breach of this Agreement which, unless we waive the breach, will entitle us to terminate this Agreement immediately upon notice to you, with no opportunity to cure.
You do not open your Bonchon Restaurant for business within 300 days after the Effective Date of this Agreement or on or before the Scheduled Opening Date, whichever is earlier; cease operating the franchised Business; abandon the franchise relationship established under this Agreement; or, fail to operate your Bonchon Restaurant for two consecutive days, or three individual days within a twelve month period, during which you are required to operate it under this Agreement, unless your failure to operate is due to force majeure (as defined in Section 20.01).
You omitted or misrepresented any material fact in the information that you furnished to us in connection with our decision to enter into this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the 'Effective Date' is the starting point for the franchisee's representation and warranty regarding the accuracy of information provided to Bonchon. This means that from the Effective Date forward, Bonchon relies on the franchisee's information as being continuously true, accurate, and complete. This representation remains in effect until the franchisee provides written notice of changes in ownership or the Operating Principal's status, and Bonchon approves these changes. This is significant because Bonchon makes business decisions based on the information provided by the franchisee.
Specifically, the selection of a Restaurant Location is tied to the Effective Date. The franchisee must select a location and receive Bonchon's written approval within 90 days of the Effective Date (or 60 days for a Remote Kitchen Restaurant). Furthermore, the franchisee must sign a lease approved by Bonchon (or provide proof of ownership or an executed contract of sale) within 120 days of the Effective Date (or 90 days for a Remote Kitchen Restaurant). Failure to secure a location within these timeframes constitutes a material breach of the Franchise Agreement, potentially leading to termination without a refund of the Initial Franchise Fee.
Bonchon also stipulates that opening the Bonchon Restaurant for business must occur within 300 days after the Effective Date of the Agreement, or on or before the Scheduled Opening Date, whichever is earlier. Failure to open the restaurant within this timeframe can result in Bonchon terminating the agreement without opportunity to cure the breach. Additionally, misrepresentation or omission of any material fact in the information provided to Bonchon can lead to immediate termination of the agreement. Therefore, the Effective Date serves as a critical benchmark for various obligations and representations made by the franchisee to Bonchon.