Within how many days of termination must I pay Bonchon the liquidated damages?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
If we terminate this Agreement because of your default or you terminate same through failure to make payment following notice and opportunity to cure (pursuant to Section 17.05 above), you and we hereby agree that the amount of damages which we would incur for premature termination of this Agreement would be difficult, if not impossible, to accurately ascertain and you will pay an amount equal to the average Continuing Royalties owed to us during the 12 months of operation preceding the effective date of the termination multiplied by the lesser of (a) 24 (being the number of months in two full years) or (b) the number of months remaining in the term of the Franchise Agreement (had it not been terminated) (the "Liquidated Damages"). The Liquidated Damages shall not be construed to be a penalty or in lieu of any other payment and shall be paid by you to us within thirty (30) days following such termination. The parties agree that the formula to calculate the Liquidated Damages is a reasonable estimation of the damages that we would incur because of the premature termination of this Agreement. The parties further acknowledge and agree that your payment of such Liquidated Damages is intended to fully compensate us only for damages resulting from the premature termination of this Agreement, and shall not constitute an election of remedies, a waiver of your default under this Agreement, waiver of any termination of this Agreement by you, nor waiver of our claim for other damages and/or equitable relief resulting from the material breach of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if the agreement is terminated due to your default or your failure to make payment after notice and opportunity to cure, you must pay Bonchon the liquidated damages within thirty (30) days following such termination.
The liquidated damages are calculated based on the average Continuing Royalties owed to Bonchon during the 12 months of operation preceding the termination date. This average is then multiplied by the lesser of 24 (representing two full years) or the number of months remaining in the franchise term had it not been terminated.
Bonchon emphasizes that this liquidated damages clause is not a penalty but a reasonable estimate of the damages they would incur due to the premature termination of the agreement. However, Bonchon retains the option to pursue other remedies available at law or in equity, including actual damages and injunctive relief, in addition to or instead of the liquidated damages. The acceptance of liquidated damages does not prevent Bonchon from pursuing other claims or remedies resulting from the breach of the agreement.