What specific actions constitute a 'material breach' of Section 7 or Section 8 of the General Terms in the Bonchon agreement?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
In any Lease, you may not create any obligations or grant any rights against us or our affiliates or agree to any term, condition or covenant which is inconsistent with this Agreement or any related agreement. You agree to timely perform all terms, conditions, covenants and obligations under the Lease. You may not assign, transfer or encumber your Lease or sublet all or any part of the Location without our advance written approval.
You must provide to us a copy of each executed lease with all exhibits, attachments, and addenda before each Due Date of Execution of Lease in Section 6.01.
If you fail to perform any of the acts or fail to deliver any of the notices required pursuant to the provisions of this Section 7 in a timely fashion, this will be a material and incurable breach of this Agreement which, unless we waive the breach, will entitle us to terminate this Agreement immediately on notice to you, with no opportunity to cure.
8. OUR DUTIES
8.01 Duties of Franchisor
So long as you are not in default of this Agreement or the Franchise Agreements, we will grant you the right and obligation to acquire and operate Bonchon franchises in the Development Territory and pursuant to the Development Schedule, upon the terms and subject to the provisions of this Agreement and the terms of each Franchise Agreement entered into between you and us and of all documents related to this Agreement and the Franchise Agreement, and to use solely and in connection with these Franchise Agreements the Bonchon System as it may be changed, improved, modified or further developed from time to time, in the Development Territory as defined in this Agreement and upon the terms and subject to the provisions of this Agreement and the terms of all documents related to this Agreement and the Franchise Agreements.
Pursuant to the Franchise Agreements and under their terms, we will offer and perform the training, instruction, assistance and other activities for which the Franchise Agreements provide.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a material breach of Section 7 involves lease-related obligations. Specifically, if a franchisee fails to perform acts or deliver notices related to the lease in a timely manner, it constitutes a material and incurable breach of the agreement. Unless Bonchon waives the breach, Bonchon can terminate the agreement immediately without an opportunity for the franchisee to cure the breach.
Section 8 outlines the duties of Bonchon as the franchisor, primarily concerning the rights granted to the franchisee to operate Bonchon franchises within a Development Territory, provided the franchisee is not in default of the agreement. It also includes Bonchon's commitment to offer training, instruction, and assistance as specified in the Franchise Agreements. The excerpt does not explicitly state what actions by Bonchon would constitute a material breach of Section 8, but it implies that failure to uphold their duties while the franchisee is in compliance could be considered a breach.
In practical terms, a Bonchon franchisee must be extremely diligent in fulfilling all lease obligations and providing all required notices to avoid immediate termination. While the document specifies franchisee actions that constitute a breach of Section 7, it lacks specific details on what actions by Bonchon would breach Section 8. A prospective franchisee should seek clarification from Bonchon regarding what specific failures on their part would constitute a material breach of their duties under Section 8.