Is there a Guarantee agreement included in the Bonchon Franchise Agreement, and if so, where is it located?

According to Bonchon's 2025 Franchise Disclosure Document, a Guarantee agreement may be required as part of the franchise agreement. Specifically, if the franchisee is a business entity, Bonchon retains the right to require owners or other parties with an interest in the franchisee or the location to execute a Guarantee. This Guarantee must be substantially in the form of Exhibit H to the Franchise Agreement.

This requirement means that individuals associated with the business entity, such as owners or investors, may need to personally guarantee the obligations of the franchise. This is a common practice in franchising, as it provides the franchisor with additional security and recourse in case the franchisee defaults on its obligations. The personal guarantee makes those individuals personally liable for the debts and obligations of the franchise, which could include unpaid royalties, rent, or other fees.

Prospective Bonchon franchisees should carefully review Exhibit H of the Franchise Agreement to understand the full scope of the Guarantee and the potential liabilities it creates. They should also seek legal counsel to fully understand the implications of signing a personal guarantee. Franchisees should also be aware that even after assigning the franchise to someone else, the guarantees remain in effect.