When transferring a Bonchon franchise, who is required to execute a general release of claims against Bonchon and its Indemnitees?

According to Bonchon's 2025 Franchise Disclosure Document, when transferring a franchise, both the franchisee and the assignee are required to execute a general release of claims against Bonchon and its Indemnitees. If either the franchisee or the assignee is a business entity, then each of their owners and guarantors must also execute this release. This release covers any and all claims, demands, and causes of action that the franchisee, their owners, the assignee, and their owners may have against Bonchon and its Indemnitees up to the date the assignee's new Franchise Agreement is executed.

In practical terms, this means that before Bonchon will finalize the transfer of a franchise to a new owner, all relevant parties must sign a document releasing Bonchon from any past claims. This is a standard practice in franchising to prevent future legal disputes arising from the previous franchisee's operation of the business. The release ensures that Bonchon is protected from potential liabilities related to the franchise up to the point of transfer.

For a prospective franchisee, this requirement highlights the importance of thoroughly understanding the financial and legal history of the franchise being acquired. It also underscores the need for careful due diligence to identify any potential claims that could arise before the transfer is complete. By signing the release, the franchisee and assignee are essentially agreeing to waive any rights to sue Bonchon for past issues, making it crucial to be fully informed about the business's past performance and any existing liabilities.