What topics are summarized in the Area Development Agreement section pertaining to the Bonchon franchise relationship?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Section in Area Development Agreement | Summary |
|---|---|---|
| a. Length of the franchise Term | 4.01 | Term is from date we sign agreement until the earlier of either the actual date of execution of the last Franchise Agreement scheduled to be signed under the Area Development Agreement or the last Date of Execution of Lease as specified in Section 6.01 of the agreement. |
| b. Renewal or extension of the term | Section 4.02 | The Area Development Agreement is not renewable. |
| c. Requirements for | None | Not Applicable. |
| you to renew or | ||
| extend | ||
| d. Termination by you | Section 15.02 |
|
| e. Termination by us without cause | None. | Not applicable. |
| l. Our approval of transfer by you | Section 12.02, 12.03 and 12.04 | No transfer without our consent except as provided in Area Development Agreement (for example, transfer to a business entity you form for convenience). (Subject to state law.) |
| m. Conditions for our | ||
| approval of transfer | Sections 12.03 and 12.04 | See l., above. |
| n. Our right of first | None | Not applicable. |
| refusal to purchase | ||
| your business | ||
| o. Our option to | None | Not applicable |
| purchase your business | ||
| p. Your death or disa- bility | Section 12.04 | On your death or disability (if you are an individual), or the death or disability of your last surviving owner (if you are a business entity), that person’s rights pass to his or her "Estate". The Estate may continue operating the Business if it provides an acceptable Area Business Manager. This Area Business Manager must assume full time operation of the franchise within 90 days of death or disability. (Subject to state law.) |
| q. Non-competition | Section 11.01 | No involvement in competing business anywhere. (Subject to state law.) |
| covenants during the | ||
| term of the franchise | ||
| r. Non-competition covenants after the franchise is terminated or expires | Section 11.01 | No involvement in competing business for 2 years within your Development Territory, within a 20 mile radius of the perimeter of your Development Territory or within a 20 mile radius of the perimeter of (or within) any Bonchon Business (whether company-owned, franchised or otherwise established and operated). (Subject to state law.) |
| s. Modification of the | Section 18.05 | No oral modifications. |
| agreement | ||
| t. Integration/ merger clause | Section 18.05 | Only the terms of the Area Development Agreement, the Exhibits to the Area Development Agreement and all agreements signed with it are enforceable (subject to state law). Any representations or promises outside of the Disclosure Document and franchise agreement may not be enforceable. |
| u. Dispute resolution by | None | Not applicable. |
| arbitration or mediation | ||
| v. Choice of forum | Sections 18.13 and 13.03 | Litigation must be in New York, New York, except that we may bring an action for an injunction in any court with jurisdiction (see Area Development Agreement). (Subject to state law). |
| w. Choice of law | Section 18.12 | New York law applies. Your state law may supersede this provision and it may not be enforceable in your state. (Subject to state law). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 71–81)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Item 17 summarizes various provisions within the Area Development Agreement that govern the franchise relationship. These provisions cover key aspects such as the term length, renewal options, and termination conditions.
Specifically, the term of the Area Development Agreement lasts from the date of signing until the earlier of either the execution date of the last Franchise Agreement scheduled or the last Date of Execution of Lease as specified in Section 6.01. The agreement is not renewable. Bonchon also outlines conditions under which the franchisee can terminate the agreement, including mutual written consent or any grounds provided by applicable law.
Additionally, the table addresses transfer conditions, specifying that transfers require Bonchon's consent, with exceptions for transfers to business entities formed for convenience. It also details procedures in case of the franchisee's death or disability, stipulating that the rights pass to the Estate, which may continue operations with an acceptable Area Business Manager assuming full-time operation within 90 days. The agreement also includes non-competition covenants during the term and for two years after termination within the Development Territory or near any Bonchon Business. Other points include modifications to the agreement, integration/merger clauses, dispute resolution, choice of forum, and choice of law.