Under what conditions can Bonchon refuse a transfer of ownership of a Bonchon franchise in Michigan?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
must comply in all respects with the requirements and prohibitions set forth in Section 8.18 of this Agreement ("Business Entity Requirements and Records").
Any transfer pursuant to this Section 14.03 will not be subject to our right of first refusal below and will not require you to pay to us any transfer fee.
14.04 Assignment By You – Sale To Third Party
You may not sell or otherwise assign or transfer all or any interest in you (if you are a business entity), the franchise conferred by this Agreement, your franchised Business, your Bonchon Restaurant, your right to use the Bonchon System, Proprietary Marks, Confidential Information and/or Manuals, or any interest in any of these, to a third party without our prior written consent. If we do not elect to exercise our right of first refusal (as provided in Section 14.06 below), which right shall not apply in the event that the assignee is a member of your immediate family, then we will not unreasonably withhold consent to the assignment and sale. You agree that it will not be unreasonable for us to impose, among other requirements, the following conditions to granting consent to the proposed assignment and sale:
- A. That the proposed assignee (meaning all individuals and entities which, after the proposed sale, transfer or assignment, will be franchisees under this Agreement or under any successor agreement) applies to us for acceptance as a franchisee, and furnishes to us the information and references that we request to determine the proposed assignee's skills, qualifications, financial condition, background and history, reputation, economic resources, education, managerial and business experience, moral character, credit rating and ability to assume your duties and obligations under this Agreement and any related agreement. You must pay the costs of any such investigation conducted by us.
- B. That the proposed assignee (or, if an entity, each and every owner or guarantor of the proposed assignee) presents itself for a personal interview at our corporate office, or any other location we designate, at the date and time we reasonably request, without expense to us. We may determine to meet with your proposed assignee at his, her or its principal
- place of business or residence and, if we do, you will reimburse us for all travel, lodging, meal and personal expenses related to such meeting.
- C.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Bonchon has the right to refuse a transfer of ownership to a third party unless the assignee is a member of your immediate family. Bonchon will not unreasonably withhold consent to the assignment and sale, but there are several conditions that must be met.
Bonchon can refuse a transfer if the proposed assignee does not apply for acceptance as a franchisee and furnish all requested information and references to determine their skills, qualifications, financial condition, background, history, reputation, economic resources, education, managerial and business experience, moral character, credit rating, and ability to assume the franchisee's duties. The franchisee is responsible for covering the costs of any investigation Bonchon conducts on the proposed assignee.
Bonchon can also refuse the transfer if the proposed assignee (or their owners/guarantors) do not attend a personal interview at Bonchon's corporate office or another designated location at the scheduled date and time. The franchisee may be required to reimburse Bonchon for travel, lodging, meal, and personal expenses related to the meeting if Bonchon chooses to meet the proposed assignee at their place of business or residence.
Additionally, Bonchon can refuse transfer if the franchisee permits 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 Bonchon's prior written consent. A violation of this restriction will give Bonchon the right to terminate the Franchise Agreement immediately upon notice.