Under what circumstances, other than the expiration of the ten-year term, can the Bonchon Franchise Agreement be terminated?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
If any valid, applicable law or regulation of a competent governmental authority with jurisdiction over this Agreement or the parties to this Agreement limits our rights of termination under this Agreement or requires longer notice or cure periods than those set forth above, then this Agreement will be considered modified to conform to the minimum notice, cure periods or restrictions upon termination required by the laws and regulations. We will not, however, be precluded from contesting the validity, enforceability or application of the laws or regulations in any action, proceeding, hearing or dispute relating to this Agreement or the termination of this Agreement.
The termination of this Agreement upon breach of your development obligations, as set forth in Section 6.01 above, will not terminate any of the Franchise Agreements executed by you before the effective date of termination of this Agreement and for which you have already commenced the Bonchon Business(es) covered by the Franchise Agreement(s), but after the effective date of the termination, you will have no right to develop or operate any additional Bonchon Business without first obtaining our express written consent, which we may withhold without cause.
If we terminate this Agreement because of your default or you terminate same through failure to make payment following notice and opportunity to cure (pursuant to Section 17.04), you must pay us all losses and expenses we incur as a result of the default or termination, including all damages, costs, expenses, and reasonable attorneys' and experts' fees directly or indirectly related thereto, such as (without limitation) lost profits, lost opportunities, damage inuring to our Proprietary Marks and reputation, travel and personnel costs and the cost of securing a new Business at or proximate to the Restaurant Location (collectively, the "Damages").
Upon any termination of this Agreement by us for cause, we will have the right immediately to enter and take possession of your Bonchon Restaurant to maintain continuous operation of the previously franchised business, provide for orderly change of management and disposition of personal property, and otherwise protect our interests.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the Franchise Agreement can be terminated under certain conditions besides the expiration of its ten-year term.
Specifically, if a law or regulation limits Bonchon's termination rights or requires longer notice or cure periods, the agreement will be modified to align with those minimum requirements. However, Bonchon retains the right to challenge the validity of such laws or regulations. Additionally, if a franchisee breaches their development obligations as outlined in Section 6.01, any existing Franchise Agreements for already operating Bonchon businesses will not be terminated. However, the franchisee will lose the right to develop or operate additional Bonchon businesses without Bonchon's express written consent.
Furthermore, if Bonchon terminates the agreement due to the franchisee's default, or if the franchisee terminates it by failing to make payment after notice and an opportunity to cure, the franchisee must cover all losses and expenses Bonchon incurs. This includes damages, costs, attorney's fees, lost profits, and damage to Bonchon's trademarks and reputation. Bonchon has the right to enter and take possession of the Bonchon Restaurant to maintain continuous operation of the previously franchised business and protect their interests.