Under what condition will the Bonchon Franchise Agreement not be binding on Bonchon Franchise LLC?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
You shall not permit any mortgage, lien, pledge or other security interest in respect of any of your business entity's shares, equity interests or other ownership interests without our prior written consent. Any violation of the preceding restriction will give us the right to terminate this Agreement immediately upon notice to you.
In any Lease, you may not create any obligations or grant any rights against us or our affiliates or agree to any term, condition or covenant which is inconsistent with this Agreement or any related agreement. You agree to timely perform all terms, conditions, covenants and obligations under the Lease. You may not assign, transfer or encumber your Lease or sublet all or any part of the Location without our advance written approval.
You must provide to us a copy of each executed lease with all exhibits, attachments, and addenda before each Due Date of Execution of Lease in Section 6.01.
If you fail to perform any of the acts or fail to deliver any of the notices required pursuant to the provisions of this Section 7 in a timely fashion, this will be a material and incurable breach of this Agreement which, unless we waive the breach, will entitle us to terminate this Agreement immediately on notice to you, with no opportunity to cure.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
The 2025 Bonchon Franchise Disclosure Document does not explicitly state a condition under which the Franchise Agreement would not be binding on Bonchon Franchise LLC. However, it does outline conditions under which the agreement can be terminated.
Item 23 details several franchisee requirements related to business entity organization, ownership interests, and lease agreements. Specifically, Bonchon can terminate the agreement immediately if a franchisee permits any mortgage, lien, pledge, or other security interest in the business entity's shares, equity interests, or other ownership interests without Bonchon's prior written consent. Similarly, failure to provide executed lease copies or assigning/transferring the lease without approval also constitutes grounds for immediate termination.
Additionally, the agreement emphasizes the franchisee's responsibility to adhere to all terms, conditions, and obligations within the lease and related agreements. While not directly stating the agreement is non-binding for Bonchon, these clauses highlight actions or inactions by the franchisee that can lead to the agreement's termination, effectively releasing Bonchon from its obligations. A prospective franchisee should seek clarification from Bonchon regarding specific scenarios where the agreement might not be binding on Bonchon itself.