Under the Bonchon agreement, what constitutes a 'Specially Designated National or Blocked Person'?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything to the contrary in this Agreement, you may not allow, effect or sustain any transfer, assignment or other disposition of this Agreement to a "Specially Designated National or Blocked Person" (as defined below) or to an entity in which a "Specially Designated National or Blocked Person has an interest. For the purposes of this Agreement, "Specially Designated National or Blocked Person" means: (i) a person or entity designated by OFAC (or any successor officer agency of the U.S. government) from time to time as a "specially designated national or blocked person" or similar status; (ii) a person or entity described in Section 1 of U.S. Executive Order 13224, issued on September 23, 2001; or, (iii) a person or entity otherwise identified by any government or legal authority as a person with whom you (or any of your owners or affiliates) or we (or any of our owners or affiliates) are prohibited from transacting business.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a "Specially Designated National or Blocked Person" is defined within the context of the franchise agreement's anti-terrorism and anti-corruption provisions. This definition is crucial because Bonchon prohibits any transfer, assignment, or disposition of the agreement to such individuals or entities in which they have an interest.
Specifically, a "Specially Designated National or Blocked Person" includes three categories: (1) any person or entity designated by the U.S. Treasury's Office of Foreign Assets Control (OFAC) as a "specially designated national or blocked person"; (2) any person or entity described in Section 1 of U.S. Executive Order 13224, issued on September 23, 2001; and (3) any person or entity otherwise identified by any government or legal authority as someone with whom Bonchon or the franchisee is prohibited from conducting business.
This definition ensures that Bonchon complies with U.S. laws and regulations related to anti-terrorism and economic sanctions. For a prospective franchisee, this means they must ensure that neither they, their affiliates, nor anyone with a direct or indirect ownership interest in their franchise is on any prohibited list or subject to any embargoes. Failure to comply with these regulations could result in the termination of the franchise agreement and potential legal consequences.