What is the 'Commencement of Operations Date' dependency on the number of Bonchon businesses?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Fee for the Bonchon Business.
6. DEVELOPMENT SCHEDULE
6.01 Development Schedule
For so long as this Agreement is in effect and you are not in default under the terms of this Agreement or any Franchise Agreement, you will have the right and obligation to execute Franchise Agreements for and commence operations of Bonchon Businesses pursuant to the development schedule below (the "Development Schedule"). The Development Schedule sets forth the date on which you must execute the Lease for each Bonchon Business (the "Due Date of Execution") and the date no later than which you must commence operations of each Bonchon Business under each Franchise Agreement (the "Commencement of Operations Date").
| Owner’s Name | Description of Interest | Ownership % | |---|---|---| | | | | | | | |
| Area Manager’s Name and Address | Position Held in Entity | Ownership % | |---|---|---| | | | | You may not develop or commence operations of more than the total number of Bonchon Businesses set forth above without first obtaining our written consent.
A Bonchon Business will be considered "developed" if: (a) the Franchise Agreement for the Bonchon Business has been signed by you and us, and (b) the Bonchon Business has commenced operations in accordance with the Franchise Agreement governing the Bonchon Business.
6.02 Failure to Fulfill Development Obligations
Except as provided in Section 17.01 below ("Unavoidable Delay or Failure to Perform (Force Majeure)"), if you fail to adhere to the Development Schedule in Section 6.01 by either: (1) failing to execute the Franchise Agreement for each Bonchon Business on or before the Due Date of Execution of the Lease specified above, or (2) failing to commence operations of each Bonchon Business on or before the applicable Commencement of Operations Date specified above, then this will constitute a material breach of this Agreement, which, unless you cure it as provided in Section 15.03 of this Agreement, will result in this Agreement being terminated immediately.
Termination of this Agreement for this reason will not be a termination (constructive or otherwise) of any Franchise Agreement(s) entered into by you and us under which you have already commenced the operation of the Bonchon Businesses covered by the Franchise Agreement(s) if you have fully performed and otherwise been in compliance with all of your obligations under the Franchise Agreement(s) in question. You will lose both the right to develop the undeveloped Bonchon Businesses in the Development Territory and the Area Development Fee attributable to the undeveloped Bonchon Businesses, and we may operate or franchise Bonchon Businesses anywhere within the Development Territory without in any way being in violation of this Agreement. This remedy of ours will be in addition to whatever other remedies we may have at law or in equity.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a franchisee's ability to develop and commence operations for a specific number of Bonchon businesses is governed by a development schedule. This schedule outlines the 'Due Date of Execution' for the lease of each Bonchon Business and the 'Commencement of Operations Date,' which is the latest date by which operations must begin under each Franchise Agreement.
The Development Schedule grants the franchisee the right and obligation to execute Franchise Agreements and commence operations, provided they are not in default under the Area Development Agreement or any Franchise Agreement. The FDD states that franchisees may not develop or commence operations of more than the total number of Bonchon Businesses without Bonchon's written consent. A Bonchon Business is considered 'developed' when the Franchise Agreement is signed and operations have commenced.
Failure to meet these deadlines, specifically either failing to execute the Franchise Agreement by the 'Due Date of Execution of the Lease' or failing to commence operations by the 'Commencement of Operations Date,' constitutes a material breach of the Area Development Agreement. Unless cured, this breach can lead to immediate termination of the Area Development Agreement, resulting in the loss of rights to develop undeveloped Bonchon Businesses and the associated Area Development Fees. Bonchon retains the right to operate or franchise businesses within the Development Territory without violating the agreement. The timely performance of these obligations is deemed of material importance to the Area Development Agreement.