When transferring a Bonchon franchise, what obligations does the transferring franchisee retain?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
t contract. | | | | s. | | | | You must arrange an inspection of the Bonchon Restaurant prior to |
| Provision | Section in Franchise Agreement* | Summary |
|---|---|---|
| the transfer and pay our On-site Inspection Upon Transfer Fee. Either you or the transferee must, at your/its expense, upgrade the Bonchon Restaurant to conform with then-current standards and specifications within the time we reasonably specify. t. You must pay us a transfer fee of $15,000 or such greater amount as is necessary to reimburse us for our reasonable costs and expenses associated with the application for transfer. Notwithstanding the foregoing, there will be no transfer fee if the assignee is a member of your immediate family. \nu. You must correct any existing deficiencies of the Restaurant of which we have notified you. (Subject to state law.) | ||
| n. Our right of first | Section 14.06 | We can match any offer for your Business. |
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, a franchisee looking to transfer their franchise has several obligations to fulfill. Bonchon must approve the transfer, and the franchisee must correct any existing deficiencies of the restaurant that Bonchon has notified them about. The transferring franchisee is also obligated to pay Bonchon a transfer fee of $15,000, or a greater amount if needed to cover Bonchon's reasonable costs and expenses associated with the transfer application. However, this fee is waived if the assignee is an immediate family member.
Furthermore, either the franchisee or the transferee is responsible for upgrading the Bonchon Restaurant to meet the current standards and specifications within a reasonable timeframe specified by Bonchon. This ensures that the restaurant maintains brand consistency and quality even after the transfer.
These obligations are typical in franchising, as franchisors like Bonchon need to maintain brand standards and ensure that new franchisees are qualified and capable. The transfer fee helps to cover the costs associated with reviewing the application and providing training or support to the new franchisee. The upgrade requirement ensures that the restaurant remains competitive and compliant with current brand standards. Prospective franchisees should carefully consider these costs and obligations when planning to sell their Bonchon franchise.