Under what circumstances will the incentives described in the Rider for a Bonchon franchise be terminated?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
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- No Transfer. The incentives described in this Rider are not transferrable. If Franchisee transfers the Franchise Agreement directly or indirectly (including through a transfer of ownership), the incentives for the Restaurant described this Rider will immediately and automatically terminate.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the incentives described in the Franchise Agreement Rider – 2025 Development Incentive Program are subject to termination if the franchisee transfers the Franchise Agreement. This includes both direct and indirect transfers, such as a transfer of ownership.
This condition means that the franchisee must maintain ownership and control of the Bonchon franchise to continue receiving the benefits outlined in the Rider. If the franchisee sells the franchise or transfers ownership to another party, the incentives will be immediately terminated. This provision protects Bonchon's interests by ensuring that the incentives are only available to the original franchisee who entered into the agreement and is expected to adhere to its terms.
For a prospective Bonchon franchisee, this condition highlights the importance of carefully considering the long-term commitment involved in owning and operating a franchise. If there is a possibility of transferring ownership in the future, the franchisee should be aware that the incentives will be lost. This could impact the financial viability of the franchise, as the incentives may include reduced franchise fees or royalty payments during the initial period of operation. Therefore, it is crucial to fully understand the terms of the Rider and the implications of any potential transfer of ownership before signing the Franchise Agreement.