How does Bonchon apply payments if there are multiple outstanding obligations?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
| (1) Type of Fee | (2) Amount | (3) Due Date | (4) Remarks |
|---|---|---|---|
| Application of | We can apply your payments to the | ||
| Funds | oldest obligation due. |
Source: Item 6 — OTHER FEES (FDD pages 13–24)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Bonchon has the discretion to apply a franchisee's payments towards the oldest outstanding obligation. This means that if a franchisee has multiple debts to Bonchon, any payment made can be applied to the debt that has been outstanding for the longest period.
For a prospective Bonchon franchisee, this policy highlights the importance of staying current with all financial obligations to the franchisor. If a franchisee falls behind on payments, any subsequent payments may be applied to the oldest debt, potentially leaving more recent obligations unpaid and subject to further penalties or interest.
This practice is fairly standard in franchising, as it allows the franchisor to manage outstanding debts in a way that minimizes their risk. Franchisees should maintain careful records of all payments and outstanding balances to ensure accurate accounting and avoid potential disputes over how payments are applied.