What is the standard cure period Bonchon provides for defaults under the franchise agreement?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
You do not comply, for a period of 15 days after notification of non-compliance by us or any governmental or quasi-governmental authority, with any federal, state or local law or regulation applicable to the operation of the franchised Business.
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- You or any of your affiliates fail, refuse or neglect to pay promptly when due any money owed to us, our affiliates or any lender which has provided financing to your franchised Business. The cure period for this default shall not be the above-referenced fifteen calendar days but, instead, will be five calendar days after we transmit to you a written notice or default. If you fail to cure any such default within such shortened cure period, then this Agreement will terminate immediately upon expiration of the applicable cure period, or any longer period required by applicable law. Notwithstanding the foregoing, we may terminate this Agreement immediately (without providing you with written notice of default) if any payment you owe to us, our affiliates or any lender which has provided financing to your franchised Business under any arrangement with us is not made within 30 calendar days after its due date.
Except as provided in Section 17.01 below ("Unavoidable Delay or Failure to Perform (Force Majeure)"), if you fail to adhere to the Development Schedule in Section 6.01 by either: (1) failing to execute the Franchise Agreement for each Bonchon Business on or before the Due Date of Execution of the Lease specified above, or (2) failing to commence operations of each Bonchon Business on or before the applicable Commencement of Operations Date specified above, then this will constitute a material breach of this Agreement, which, unless you cure it as provided in Section 15.03 of this Agreement, will result in this Agreement being terminated immediately.
You will have materially breached this Agreement and we may, at our option, terminate this Agreement and all rights granted under this Agreement, without giving you any opportunity to cure the breach, effective immediately upon your receipt of notice (which, whether sent by certified mail, registered mail, overnight courier or personal physical delivery, will be deemed to have been received by you upon delivery or first attempted delivery of the notice to you) upon the occurrence of any of the following events:
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.
You do not secure the Restaurant Location for the franchised Business within the time limits and following the procedures specified in Article 6 of this Agreement.
You lose the right to possession of the Restaurant Location, provided that if the loss of possession results from the government's exercise of the power of eminent domain, or if, through no fault of yours, the premises are damaged or destroyed, then you will have thirty days after this event to apply for our approval to relocate your Bonchon Restaurant in accordance with the relocation provisions of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the standard cure period for most defaults under the franchise agreement is 15 calendar days. This means that if Bonchon believes a franchisee has violated the agreement, they will typically provide written notice, and the franchisee has 15 days to correct the issue.
However, there are exceptions to this standard cure period. If the default involves failing to promptly pay money owed to Bonchon, its affiliates, or any lender that has provided financing to the franchisee's business, the cure period is shortened to five calendar days after Bonchon transmits a written notice of default. Furthermore, Bonchon can terminate the agreement immediately without notice if any payment is not made within 30 calendar days after its due date.
Additionally, there are certain breaches of the agreement that Bonchon deems so severe that they warrant immediate termination without any opportunity to cure. These include failing to open the restaurant within 300 days of the agreement's effective date or by the scheduled opening date, misrepresenting material facts during the application process, failing to secure a restaurant location within the specified time limits, or losing the right to possession of the restaurant location. A franchisee's failure to adhere to the development schedule can also result in immediate termination if not cured as per section 15.03 of the agreement.
Prospective Bonchon franchisees should carefully review Item 23 of the Franchise Disclosure Document to fully understand the circumstances under which they may be considered in default and the applicable cure periods, or lack thereof. Understanding these provisions is crucial for maintaining a successful and compliant franchise operation.