Under what circumstances is a Bonchon franchisee prohibited from subfranchising or granting interests in the franchise agreement to another person?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
We grant you, and you accept, the right to use the Proprietary Marks and the System in connection with establishing and operating a Bonchon Business and Restaurant from the Restaurant Location specified in Section 3.01 of this Agreement. You agree to use the Proprietary Marks and Bonchon System as we may change, improve, modify or further develop them from time to time as provided in this Agreement, and to operate your Bonchon Business and its Restaurant only in accordance with the terms and conditions of this Agreement and all related agreements, the Manuals and any Supplement to the Manuals. You further agree to honestly and diligently perform your obligations under this Agreement and to use your best efforts to promote the Restaurant. You may not subfranchise or otherwise grant to any other "Person" (meaning both natural persons and legal entities, including corporations, partnerships, limited liability companies and trusts) any interest in this Agreement or the franchise granted hereby, except as otherwise provided in this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a franchisee is generally prohibited from subfranchising or granting interests in the franchise agreement to another party. Bonchon grants the franchisee the right to use its Proprietary Marks and System for operating a Bonchon Restaurant at a specific location. The franchisee agrees to adhere to the terms of the agreement, manuals, and any supplements.
The franchise agreement explicitly states that the franchisee "may not subfranchise or otherwise grant to any other 'Person'…any interest in this Agreement or the franchise granted hereby, except as otherwise provided in this Agreement." This means that unless specifically allowed within the franchise agreement, a franchisee cannot transfer their rights or obligations to another party.
This restriction is typical in franchising, as franchisors like Bonchon want to maintain control over who operates their branded businesses to ensure quality and consistency. Any unauthorized attempt to subfranchise or transfer the agreement is considered a material breach, potentially leading to immediate termination of the agreement by Bonchon.