Under what conditions can Bonchon purchase all remaining ownership interests in a Bonchon franchise if the franchisee is a business entity?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
- F. Without our prior written consent (which shall not be unreasonably withheld, delayed or conditioned), you may 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. Any violation of this restriction will give us the right to terminate this Agreement immediately upon notice to you.
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.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
Based on the 2025 Bonchon Franchise Disclosure Document, if a Bonchon franchisee is a business entity, Bonchon does not have the right to purchase all remaining ownership interests in the franchise. However, Bonchon does have the right to terminate the agreement immediately if the franchisee permits any mortgage, lien, pledge, or other security interest in respect of any of the business entity's shares, equity interests, or other ownership interests without Bonchon's prior written consent.
Additionally, the organizational documents of the business entity must state that the issuance and transfer of any interest in the business entity are restricted by the terms of the Franchise Agreement and are subject to Bonchon's prior written consent. The business entity's organizational documents must also include a clause that the Franchise Agreement supersedes any conflicting provisions in the business entity's organizational documents.
Furthermore, Bonchon requires that the business entity maintain stop instructions against the transfer on your business entity's corporate records of any securities or other ownership interests, and will not issue securities or other evidences of ownership without a specific legend printed legibly and conspicuously on the face of the security or other evidence of ownership.