For the agreement with Bonchon, what constitutes a 'Year'?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
ree to submit proof of your expenditures under the New Restaurant Marketing Plan.
After your obligations under the New Restaurant Marketing Plan have been fully satisfied and continuing through the end of your Bonchon Business' first full calendar year of operations, you agree to expend on average the greater of: $1,166 per month or 1% of the preceding month's Gross Revenues on Local advertising and promotion. Following your Bonchon Business' first full calendar year of operations and continuing for the remainder of the Initial Term of your Franchise Agreement, you agree to expend annually at least 2% of the previous year's Gross Revenues on Local advertising and promotion. "Local advertising and promotion" means the local or regional Advertising and promotional activities that we specify in our Manuals or otherwise, or approve in advance as provided in Section 10.02 of the Franchise Agreement, including, but not limited to, expenditures on television, radio, newspaper, magazines, out of home, posters, banners, brochure, direct mail, social media platforms such as Facebook, Instagram, yelp, and other digital platforms.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a 'year' is defined in two different ways depending on the context. For the purposes of local advertising and promotion, Bonchon defines a 'year' as a calendar year. Franchisees must spend a certain percentage of the previous year's gross revenues on local advertising and promotion, and they must provide an accounting of these expenditures to Bonchon by January 15th of each year.
In contrast, the license agreement that Bonchon has with its licensor defines a 'year' differently. The initial license agreement was for a term of 20 years and is automatically renewable for additional consecutive terms of 20 years unless the parties mutually agree otherwise.
Therefore, when reviewing the Bonchon Franchise Agreement, it is important to pay close attention to the context in which the term 'year' is used to determine the relevant definition.