Does Bonchon specify conditions under which consent to assignment will not be unreasonably withheld?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
must comply in all respects with the requirements and prohibitions set forth in Section 8.18 of this Agreement ("Business Entity Requirements and Records").
Any transfer pursuant to this Section 14.03 will not be subject to our right of first refusal below and will not require you to pay to us any transfer fee.
14.04 Assignment By You – Sale To Third Party
You may not sell or otherwise assign or transfer all or any interest in you (if you are a business entity), the franchise conferred by this Agreement, your franchised Business, your Bonchon Restaurant, your right to use the Bonchon System, Proprietary Marks, Confidential Information and/or Manuals, or any interest in any of these, to a third party without our prior written consent. If we do not elect to exercise our right of first refusal (as provided in Section 14.06 below), which right shall not apply in the event that the assignee is a member of your immediate family, then we will not unreasonably withhold consent to the assignment and sale. You agree that it will not be unreasonable for us to impose, among other requirements, the following conditions to granting consent to the proposed assignment and sale:
- A. That the proposed assignee (meaning all individuals and entities which, after the proposed sale, transfer or assignment, will be franchisees under this Agreement or under any successor agreement) applies to us for acceptance as a franchisee, and furnishes to us the information and references that we request to determine the proposed assignee's skills, qualifications, financial condition, background and history, reputation, economic resources, education, managerial and business experience, moral character, credit rating and ability to assume your duties and obligations under this Agreement and any related agreement. You must pay the costs of any such investigation conducted by us.
- B. That the proposed assignee (or, if an entity, each and every owner or guarantor of the proposed assignee) presents itself for a personal interview at our corporate office, or any other location we designate, at the date and time we reasonably request, without expense to us. We may determine to meet with your proposed assignee at his, her or its principal
- place of business or residence and, if we do, you will reimburse us for all travel, lodging, meal and personal expenses related to such meeting.
- C. That the proposed assignee has the organizational, managerial and financial structure, financial resources and capital required to conduct the franchised Business in accordance with such standards and the satisfaction of such conditions as we indicate from time to time, taking into account such factors (among others) as the number of Restaurants and market areas involved and their geographic proximity.
- D. That the proposed assignee comply with our ownership requirements relative to the control of the proposed assignee and the franchised Business.
- E.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Bonchon will not unreasonably withhold consent to the assignment and sale of a franchise if they do not exercise their right of first refusal and the assignee is a member of the franchisee's immediate family. However, Bonchon specifies conditions that it would not be unreasonable to impose.
Specifically, Bonchon may require that the proposed assignee apply for acceptance as a franchisee and furnish information and references to determine their skills, qualifications, financial condition, background, history, reputation, economic resources, education, managerial and business experience, moral character, credit rating, and ability to assume the franchisee's duties and obligations. The franchisee must cover the costs of any investigation conducted by Bonchon.
Bonchon may also require the proposed assignee (or each owner/guarantor, if an entity) to attend a personal interview at Bonchon's corporate office or another designated location, at the assignee's expense. If Bonchon chooses to meet the assignee at their place of business or residence, the franchisee will reimburse Bonchon for all travel, lodging, meal, and personal expenses related to the meeting. Additionally, Bonchon will not unreasonably withhold or delay consent to assignment to a business entity formed for ownership convenience if certain conditions are met, including that the new entity satisfies requirements in other sections of the agreement, each individual has the same proportionate ownership, both the franchisee and the new entity are jointly liable, and each equity holder signs a Confidentiality/Non-Competition Agreement.