When is the Area Development Fee due for a Bonchon franchise?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
| (1) Type of expenditure | (2) Amount | (3) Method of payment | (4) When due | (5) To whom payment is to be made |
|---|---|---|---|---|
| Area Development Fee | $45,000- $125,000 See Item 5 and Note 1 | Lump Sum | At signing of Area Development Agreement | Us |
| Professional Fees – Legal | $2,000- $5,000 See Note 2 | As third party specifies | As Incurred | Attorney/ Accountant |
| TOTAL | ||||
| $47,000 | ||||
| to | ||||
| $130,000 | ||||
| (Note | ||||
| 3) |
Notes
- [1] If you sign an Area Development Agreement with us, then you will pay an Area Development Fee to us in full when you sign the Area Development Agreement. The Area Development Fee is equal to (i) the Initial Franchisee Fee for the first Bonchon Business that you will develop and (ii) a Deposit Fee of $10,000 for each subsequent Bonchon Business you wish to develop, and therefore varies depending on the number of Bonchon Businesses you agree to open within your Development Territory (as defined in the Area Development Agreement). The Area Development Fee is fully earned when paid and it is not refundable under any circumstances. The low end of the Area Development Fee is for the development of 2 Bonchon Businesses and the high end is for the development of 10
Source: Item 7 — ESTIMATED INITIAL INVESTMENT YOUR ESTIMATED INITIAL INVESTMENT\ (FDD pages 24–37)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if a franchisee signs an Area Development Agreement with Bonchon, the Area Development Fee is due in full when the Area Development Agreement is signed. The Area Development Fee is the sum of the Initial Franchise Fee for the first Bonchon restaurant to be developed and a Deposit Fee of $10,000 for each subsequent Bonchon restaurant the franchisee intends to develop.
For example, if a franchisee plans to open three Bonchon restaurants, the Area Development Fee would include the Initial Franchise Fee for the first restaurant plus a $10,000 deposit for each of the two additional restaurants. The total Area Development Fee would therefore be the Initial Franchise Fee + ($10,000 x 2). The Initial Franchise Fee varies based on the number of restaurants in the development schedule. For restaurants 1-5, the fee is $35,000; for restaurants 6-10, it is $30,000; and for 11 or more, it is $25,000.
The FDD specifies that the Area Development Fee is fully earned by Bonchon upon payment and is non-refundable under any circumstances. The low end of the Area Development Fee is for the development of two Bonchon restaurants, while the high end is for the development of ten Bonchon restaurants, but this is not a maximum number. Prospective franchisees should carefully consider the number of restaurants they commit to developing, as the fee is non-refundable, and they are obligated to open the agreed-upon number of locations.