Under what condition are non-parties to the Bonchon Franchise Agreement bound to the confidentiality and/or non-competition provisions?

According to Bonchon's 2025 Franchise Disclosure Document, non-parties to the Franchise Agreement are only bound to the confidentiality and/or non-competition provisions if they execute a Confidentiality/Non-Competition Agreement themselves. This amendment clarifies the extent to which individuals or entities not directly part of the franchise agreement are subject to these restrictions.

This condition is significant for prospective Bonchon franchisees because it defines the scope of responsibility for confidentiality and non-competition. It means that family members, business partners, or other related parties are not automatically bound by these provisions unless they individually sign the agreement. This allows franchisees to understand exactly who needs to sign a confidentiality or non-compete agreement.

Bonchon also requires franchisees to obtain Confidentiality/Non-Competition Agreements from their Operating Principal (if such individual has an ownership interest), owners, equity holders, control persons, shareholders, members, partners and general partner(s); all of your officers, directors and managers; and, all persons possessing equivalent positions in any business entity which directly or indirectly owns and/or controls you. Franchisees must also obtain Confidentiality Agreements from their Operating Principal (if such individual does not hold an ownership interest), General Manager, Area Manager and all other managerial staff before their employment or promotion. This ensures that key individuals associated with the franchise are legally bound to protect Bonchon's confidential information and refrain from competitive activities.

This requirement is fairly standard in franchising, as franchisors typically seek to protect their trade secrets and business methods. By ensuring that key personnel and related parties sign these agreements, Bonchon aims to minimize the risk of confidential information being leaked or used to compete against the franchise system. Franchisees should be aware of these requirements and ensure compliance to avoid potential legal issues.