Unless Bonchon provides written consent, what restriction is placed on the activities allowed for the franchisee's business entity according to its formation and governing documents?

According to Bonchon's 2025 Franchise Disclosure Document, unless Bonchon provides written consent, a franchisee's business entity's formation and governing documents must stipulate that its activities are exclusively confined to operating the franchised Bonchon business. This means the business entity can only engage in activities directly related to running the Bonchon franchise.

This restriction has significant implications for a prospective Bonchon franchisee. It prevents the franchisee from using the same business entity to conduct other business ventures unrelated to the Bonchon franchise without prior written approval from Bonchon. This ensures that the franchisee's focus remains solely on the Bonchon business, and it protects Bonchon from potential liabilities or conflicts of interest that could arise if the franchisee engages in other business activities through the same entity.

Franchisees should carefully consider this restriction when establishing their business entity. They need to ensure that the organizational documents clearly reflect this limitation. If a franchisee wishes to pursue other business ventures, they would typically need to establish a separate legal entity to avoid violating the terms of the franchise agreement. It is important to communicate with Bonchon regarding any potential conflicts or if there is a need to engage in activities outside of the franchised business to seek their written consent and avoid potential breaches of the agreement.