Are amounts received from suppliers by Bonchon based on franchisee purchases considered the exclusive property of Bonchon and its affiliates?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
We and/or our affiliates may derive revenue - - in the form of promotional allowances, volume discounts, commissions, other discounts, performance payments, signing bonuses, rebates, marketing and advertising allowances, free products, and other economic benefits and payments - - from suppliers that we designate, approve, or recommend for some or all Bonchon Restaurants on account of those suppliers'
prospective or actual dealings with your Restaurant and other Bonchon Restaurants. That revenue may or may not be related to services we and our affiliates perform. All amounts received from suppliers, whether or not based on your or other franchisees' purchases from those suppliers, will be our and our affiliates' exclusive property, which we and our affiliates may retain and use without restriction for any purposes we and our affiliates deem appropriate. Any products or services that we or our affiliates sell you directly may be sold to you at prices exceeding our and their costs.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 37–42)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, any revenues that Bonchon or its affiliates receive from suppliers are their exclusive property. These revenues can take various forms, including promotional allowances, volume discounts, commissions, performance payments, signing bonuses, rebates, marketing and advertising allowances, and free products. These amounts may or may not be directly related to services Bonchon and its affiliates perform.
This means that even if these revenues are based on franchisee purchases, Bonchon and its affiliates have the right to retain and use these funds without any restrictions, for any purpose they deem appropriate. Bonchon may also sell products or services directly to franchisees at prices exceeding their costs.
For a prospective franchisee, this indicates that while they are required to purchase from designated suppliers, any financial benefits or incentives those suppliers provide to Bonchon do not necessarily translate into direct savings or benefits for the franchisee. It is important for franchisees to understand that Bonchon has full discretion over these supplier revenues.