Under what conditions can Bonchon terminate the franchise agreement immediately for unauthorized use of Proprietary Marks?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
A. You must not use, and must not permit or cause another to use, the Proprietary Marks except in the manner and to the extent specifically licensed to you under this Agreement. You agree that each use you make of any Proprietary Mark will accurately portray the Mark and that the Mark will not be used or portrayed in a manner which jeopardizes the goodwill associated with the Mark or the Bonchon System. You agree to use the Proprietary Marks in full compliance with rules we
prescribe from time to time in our Manuals or otherwise. You are prohibited (except as expressly provided in this Agreement) from using any Proprietary Mark with any prefix, suffix, or other modifying words, terms, designs or symbols (other than logos licensed by us to you). You may not use any Proprietary Mark in connection with the sale of any unauthorized service, product or program or in any other manner not explicitly authorized in writing by us. You may use the Proprietary Marks only for the operation of the franchised Business or in advertising for the franchised Business. Your right to use the Proprietary Marks is limited to the uses authorized under this Agreement. Any unauthorized use of the Proprietary Marks by you will constitute an infringement of our rights and a material and incurable breach of this Agreement which, unless we waive the breach, will entitle us to terminate this Agreement immediately upon notice to you, with no opportunity to cure.
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 immediately if a franchisee engages in any unauthorized use of Bonchon's Proprietary Marks. This is considered a material and incurable breach of the agreement.
Specifically, the franchise agreement outlines that franchisees must only use the Proprietary Marks in the manner and to the extent explicitly licensed to them. Any use of the marks must accurately portray them and not jeopardize the goodwill associated with the marks or the Bonchon System. Franchisees must comply with the rules prescribed in Bonchon's manuals or otherwise.
Unauthorized use includes using any Proprietary Mark with prefixes, suffixes, or other modifications (unless expressly allowed), using the marks in connection with the sale of any unauthorized service, product, or program, or using the marks in any manner not explicitly authorized in writing by Bonchon. The right to use the Proprietary Marks is strictly limited to the operation and advertising of the franchised business as authorized under the agreement.
This means that a Bonchon franchisee must be extremely careful to adhere to Bonchon's guidelines regarding branding and marketing. Any deviation, no matter how small it may seem, could result in immediate termination of the franchise agreement without an opportunity to correct the issue. This is a significant risk for franchisees, as it could lead to the loss of their business and investment.