When is the Area Development Fee for a Bonchon Area Development Agreement due?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
tial Franchise Fee.
If you will operate under an Area Development Agreement (in which case you must agree to develop and operate two or more Bonchon Businesses and Restaurants), you must pay an Area Development Fee equal to: (i) the Initial Franchise Fee for the first Bonchon Business that you will develop, plus a $10,000 deposit for each subsequent Bonchon Business you are required to develop, own and operate (the "Area Development Deposit") when you sign the Area Development Agreement. The Area Development Deposit for each Bonchon Restaurant Business will be applied against the Initial Franchise Fee for that Bonchon Restaurant Business which would otherwise be payable. The Area Development Fee is fully earned when paid and it is not refundable unde
Source: Item 5 — INITIAL FEES (FDD pages 12–13)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the Area Development Fee is due when you sign the Area Development Agreement. This fee is comprised of the initial franchise fee for the first Bonchon restaurant you plan to develop, in addition to a $10,000 deposit for each subsequent restaurant you commit to developing, owning, and operating.
The Area Development Deposit serves as a credit towards the Initial Franchise Fee for each Bonchon restaurant opened under the Area Development Agreement. It's important to note that the Area Development Fee is considered fully earned upon payment and is non-refundable under any circumstances. This means that if a franchisee is unable to open the number of restaurants agreed upon in the Area Development Agreement, they will not receive a refund of the Area Development Fees already paid to Bonchon.
This up-front, non-refundable payment is a common practice in area development franchise agreements. It is designed to compensate Bonchon for the resources and support they provide in helping the developer secure territory and prepare to launch multiple locations. Prospective franchisees should carefully consider their ability to meet the development schedule and financial obligations before entering into an Area Development Agreement with Bonchon, as failing to do so could result in the loss of the Area Development Fees.