When is the Area Development Fee for a Bonchon franchise due, and is it refundable?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
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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 you sign an Area Development Agreement with Bonchon, you must pay the Area Development Fee in full when you sign the agreement. This fee covers both the Initial Franchise Fee for your first Bonchon restaurant and a $10,000 deposit for each additional Bonchon restaurant you plan to develop. The total Area Development Fee will vary based on the number of restaurants you commit to opening within your designated Development Territory.
Importantly, the Area Development Fee is considered fully earned by Bonchon upon payment and is explicitly stated as non-refundable under any circumstances. This means that once you pay the fee, you cannot get it back, even if you later decide not to develop all the restaurants you initially planned.
Prospective Bonchon franchisees should carefully consider the number of restaurants they commit to developing, as this decision directly impacts the Area Development Fee. Given that the fee is non-refundable, it's crucial to have a well-researched and solid business plan before signing the Area Development Agreement to avoid paying for development rights you may not use.