Under what condition regarding payments or defaults can a Bonchon franchisee's proposed transfer be blocked?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Per Section 17.06 ("Cross-Default"), you (or any of your owners) fail to cure within the applicable time period any breaches under this Agreement, or any other agreement between you (or any of your affiliates) and us (or any of our affiliates) including, but not limited to, any other franchise agreement, area development agreement, lease or promissory note.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a franchisee's proposed transfer can be blocked if they fail to cure breaches under the Franchise Agreement or any other agreement with Bonchon or its affiliates within the specified time period. This includes, but is not limited to, other franchise agreements, area development agreements, leases, or promissory notes.
This condition means that if a Bonchon franchisee has any outstanding financial or contractual obligations to Bonchon, they must resolve these issues before they can transfer their franchise to a new owner. This protects Bonchon by ensuring that any existing debts or unresolved issues are addressed before a new franchisee takes over the business. The cross-default provision ensures that all agreements between the franchisee and Bonchon are considered, not just the Franchise Agreement itself.
This type of provision is relatively common in franchising, as franchisors want to ensure the financial stability and compliance of their franchisees. Prospective Bonchon franchisees should carefully review all agreements with Bonchon to understand their obligations and the potential consequences of default. They should also maintain open communication with Bonchon to address any issues promptly and avoid jeopardizing their ability to transfer the franchise in the future.