What was the balance due to BH for Bonchon as of December 31, 2023?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
respectively, and is included in "Selling, general and administrative expenses" in the | accompanying statements of income and changes in member's equity. At December 31, | 2024 | and | 2023, | the balance | due to BH | amounted to $186,196 | and | $242,943,
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the balance due to Bonchon Holdings LLC (BH) as of December 31, 2023, was $242,943. This balance reflects the amount Bonchon Franchise, LLC owed to its affiliated entity, BH, for management and administrative support services provided.
The management service agreement between Bonchon Franchise, LLC and BH stipulates that Bonchon Franchise, LLC reimburses BH for actual costs incurred, plus a 5% markup for these services. For the year ended December 31, 2023, the total management fee charged to Bonchon Franchise, LLC under this agreement was $7,198,746. This fee is categorized within "Selling, general and administrative expenses" in Bonchon's financial statements.
It's important for a prospective franchisee to understand these related-party transactions, as they can impact the financial performance of Bonchon. While the FDD provides figures for the balance due to BH, it does not detail the specific nature of the management and administrative support services provided. A potential franchisee should inquire about the specifics of these services to fully understand the value received for the fees paid.