Under what circumstances related to renewal or transfer of a Bonchon franchise must a franchisee sign a general release of claims?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
in writing that all of the transferee's obligations under promissory notes, loan agreements, or security interests reserved in the Restaurant are subordinate to the assignee's obligation to pay Continuing Royalties, System Brand Fund Contributions, and all other amounts due to us, our affiliates, and third party vendors and otherwise to comply with this Agreement.
- O. That you and, if you are a business entity, each of your owners and Guarantors, and the assignee (and if the assignee is a business entity, each of each owners and guarantors) execute a general release of any and all claims, demands and causes of action which you, such owners or the assignee and its owners may or might have against us and/or any of the Indemnitees through the date of execution of the assignee's new Franchise Agreement.
- P. That if the assignee is a business entity, all of the requirements of its new Franchise Agreement concerning business entities must be complied with before we will execute the new Franchise Agreement and, as applicable, will continue to be complied with thereafter.
- Q.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a franchisee must sign a general release of claims under two specific circumstances: when transferring the franchise to an assignee and when seeking a successor term (renewal) of the franchise agreement. In the case of a transfer, the franchisee, their owners and guarantors, and the assignee (including their owners and guarantors if the assignee is a business entity) must execute a general release of claims against Bonchon and its related parties. This release covers any claims up to the date of the assignee's new Franchise Agreement.
For a renewal, the franchisee (and their owners if the franchisee is a business entity) must sign Bonchon's then-current form of General Release. This release covers any and all claims the franchisee may have related to the current agreement or under federal, state, or local laws, rules, regulations, or orders. However, it does not release Bonchon from future claims related to any Successor Franchise Agreement.
These requirements are fairly standard in franchising. The general release protects Bonchon from potential legal issues arising from the previous franchise term or the transfer process. Franchisees should carefully review the terms of the release with legal counsel to understand the scope of claims they are waiving. Franchisees should also consider the implications of signing a release, especially if there are ongoing disputes or concerns with Bonchon.