Under what conditions will Bonchon not unreasonably withhold consent for a franchisee to transfer their interest to a business entity they form?

According to Bonchon's 2025 Franchise Disclosure Document, Bonchon will not unreasonably withhold or delay consent for a franchisee to assign their franchise to a business entity formed solely for ownership convenience, provided specific conditions are met. These conditions ensure that the transfer is primarily for administrative purposes and does not fundamentally alter the ownership or operational control of the franchise.

First, the business entity must be newly formed, and all requirements outlined in Sections 9.04 and 18.15 of the franchise agreement must be satisfied. Second, each individual involved in the new entity must maintain the same proportionate ownership interest they held in the Bonchon business before the assignment. This ensures that the transfer does not result in a change of control or ownership structure.

Furthermore, both the franchisee and the new business entity must sign an agreement with Bonchon, accepting joint and several liability for all obligations under the existing franchise agreement. This means that both the original franchisee and the new entity are equally responsible for fulfilling the terms of the agreement. Additionally, each present and future equity holder in the new entity must sign Bonchon's Confidentiality/Non-Competition Agreement, reinforcing the protection of Bonchon's proprietary information and business practices.

These conditions are typical in franchising to ensure brand consistency, protect the franchisor's interests, and maintain the integrity of the franchise system. By requiring these stipulations, Bonchon aims to facilitate legitimate business structuring while safeguarding its brand standards and contractual agreements.