Under what condition can Bonchon terminate the franchise agreement if a franchisee fails to provide financial statements or tax returns?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Social Security payments, taxes and fees required to be paid by you to any governmental agency or entity have been paid, and that if you are a business entity, there is no reason to believe that your entity's status has been impaired.
- E. You must also provide any other information that we reasonably request from time to time.
- F. If you do not timely furnis
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Bonchon can terminate the franchise agreement if a franchisee fails to furnish financial statements or tax returns. Specifically, if a franchisee does not provide the required financial statements or tax returns in a timely manner, Bonchon can elect to terminate the agreement. However, Bonchon must first provide notice to the franchisee and an opportunity to correct the default.
Bonchon requires franchisees to submit a statement of profit and loss and a balance sheet within 90 days following the end of each fiscal year. These financial statements must be prepared on a compilation basis and certified as true and correct by the franchisee. Bonchon also has the right to request these annual financial statements to be audited by an independent certified public accountant. Additionally, franchisees must furnish exact copies of their annual tax returns within 30 days of filing, along with a certificate from an independent certified public accountant confirming that all required payments have been made to governmental entities and that the franchisee's business entity status is unimpaired.
If a franchisee fails to provide these financial statements or tax returns on time, they will incur a late charge of $50 per month for each overdue document. More importantly, this failure gives Bonchon the option to terminate the franchise agreement, provided they give the franchisee notice and an opportunity to correct the situation. This emphasizes the importance of franchisees maintaining accurate records and meeting all financial reporting deadlines to remain in compliance with the franchise agreement and avoid potential termination.