Within what timeframe must Bonchon respond to a franchisee's notice of a proposed assignment?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are subject to, or assigned to, a third party individual or entity which has made a bona fide offer to accept an assignment of this Agreement as contemplated by the U.S. Bankruptcy Code, then you must notify us of any such proposed assignment or assumption within five days after your receipt of such proposed assignee's offer to accept assignment or to assume your rights and obligations under this Agreement. Such notice must be given to us, in any event, no later than ten days prior to the date application is made to a court of competent jurisdiction for authority and approval to enter into such assignment and assumption.
The notice required above must contain the following: (i) the name and address of the proposed assignee; (ii) all of the terms and conditions of the proposed assignment and assumption; and, (iii) adequate assurance to be provided to us to assure the proposed assignee's future performance (as defined below) under this Agreement, including (without limitation) the assurance referred to in Section 365 of the U.S. Bankruptcy Code and the satisfaction of the preconditions to assignment set forth in Section 14.04 of this Agreement.
We will then have the prior right and option, to be exercised by notice given at any time prior to the effective date of the proposed assignment and assumption, to accept an assignment of this Agreement to ourselves, our affiliate or another franchisee, upon the same terms and conditions, and for the same consideration (if any), as in the bona fide offer made by the proposed assignee, less any brokerage commissions or other expenses which may be saved by you as a result of our exercise of the rights and options granted to us herein. Under no circumstance shall we be liable for the payment of any brokerage commissions or other expenses as a result of our exercise of our rights and options hereunder unless we otherwise agree in writing.
If we elect not to exercise our right of first refusal and we consent to the proposed assignment or redemption, then you will, subject to the provisions of this Article, be free to assign this Agreement or the franchised Business to your proposed assignee on the terms and conditions specified in the notice if you satisfy the conditions of Section 14.04 for our approval of an assignment and if you close the transaction within sixty days (or such further time as may be stipulated by law, rule or regulation).
If, however, the terms specified in your notice are changed, the changed terms will be considered a new offer, and we will have an identical right of first refusal with respect to this new offer.
Further, if you fail to close the assignment transaction within sixty days (or such further period of time as may be stipulated by applicable law, rule or regulation), then our right of first refusal hereunder shall be restored and we may elect to exercise same within thirty days thereafter.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if a franchisee intends to assign their agreement due to a bona fide offer during bankruptcy proceedings, they must notify Bonchon within five days of receiving the offer, but no later than ten days before applying to a court for approval of the assignment. This notice must include the name and address of the proposed assignee, the terms of the assignment, and assurance of the assignee's future performance, meeting the requirements of Section 14.04 of the Franchise Agreement and Section 365 of the U.S. Bankruptcy Code. Bonchon then has the option to accept the assignment themselves, or to assign it to an affiliate or another franchisee, by giving notice before the effective date of the proposed assignment.
If the assignment is not related to bankruptcy, Bonchon has a right of first refusal. If Bonchon elects not to exercise this right and consents to the assignment, the franchisee is free to assign the agreement, provided they meet the conditions of Section 14.04 for approval and close the transaction within sixty days, unless a different timeframe is stipulated by law. If the terms of the offer change, it is considered a new offer, and Bonchon has a renewed right of first refusal.
If the franchisee fails to close the assignment within sixty days (or any other period stipulated by law), Bonchon's right of first refusal is restored, and they have thirty days to exercise it. Bonchon's decision not to exercise their right of first refusal does not constitute approval of the proposed assignee or the transaction itself, and both parties must still comply with all criteria and procedures for assignment as specified in Article 14 of the agreement. These stipulations ensure Bonchon maintains control over who becomes a franchisee and under what terms, even when a franchisee seeks to transfer their business.