Under what circumstances will Bonchon indemnify a director, officer, or committee member in a legal proceeding not brought by or in the right of Bonchon?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
The Corporation shall indemnify any person who is or was a party to or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director, officer, or member of a committee of the Corporation as follows:
- A.
If the action, suit or proceeding is not by or in the right of the Corporation:
(1) against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith to the extent that he has been successful on the merits or otherwise in defense of such action, suit or proceeding, or of any claim, issue or matter therein, and
(2) against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection therewith if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Bonchon will indemnify a director, officer, or committee member in a legal proceeding not brought by or in the right of Bonchon under specific conditions. Bonchon will cover expenses, including attorney's fees, if the individual is successful on the merits or otherwise in the defense of the action.
Bonchon will also cover expenses, judgments, fines, and settlement amounts if the individual acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interests of Bonchon. In a criminal action, the individual must have had no reasonable cause to believe their conduct was unlawful.
This indemnification arrangement protects Bonchon's directors, officers, and committee members from personal liability in certain legal situations, provided they acted in good faith and in the company's best interest. This is a fairly standard practice in franchising, as it allows individuals to serve Bonchon without undue fear of personal legal repercussions for their actions taken on behalf of the company.