What conditions must a Bonchon franchisee satisfy to receive the incentives described in Sections 2 and 3 of the rider?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
med fully earned when paid solely in consideration of our execution of this Agreement and not in exchange for any particular products, services or assistance.
- Continuing Royalty. The first paragraph of Section 5.02 of the Franchise Agreement ("Continuing Royalty") is hereby amended to read as follows:
From the opening date of your Bonchon Restaurant and continuing through the end of your Bonchon Restaurant's first full twelve months of operations, you agree (subject to the terms and conditions of the Franchise Agreement Rider – 2025 Development Incentive Program which you have executed in connection with this Agreement) to pay us a weekly Continuing Royalty equal to 2.5% of your previous week's Gross Revenues, as defined in Section 5.05 ("Gross Revenues"). After your Restaurant's first full twelve months of operations and continuing through the remainder of the Initial Term of the Franchise Agreement, you agree to pay us a weekly Continuing Royalty equal to 5.0% of your previous week's Gross Revenues. The Continuing Royalty is solely in consideration of our granting you the franchise conferred by this Agreement and is not in exchange for any particular goods, services or assistance we may furnish you.
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- Conditions. Franchisee acknowledges, understands and expressly agrees that each of the following conditions must be satisfied in order for Franchisee to receive the incentives described in Sections 2 and 3 of this Rider for the subject being opened under the Area Development Agreement:
- a. The Restaurant opens to the general public and commences regular operations at least 30 days prior to its Scheduled Opening Date as reflected in Section 6.01 of the Area Development Agreement;
- b. Franchisee has fulfilled all obligations under the New Marketing Plan for its Restaurant as required under Section 10.03 of the Franchise Agreement;
- c. Franchisee is in full compliance with the Franchise Agreement, and all other agreements with Franchisor and its affiliates; and
- d. Area Developer (and its approved affiliates operating franchised Businesses under the Area Develop
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a franchisee must meet specific conditions to receive the incentives outlined in Sections 2 and 3 of the Franchise Agreement Rider – 2025 Development Incentive Program. These incentives relate to the initial franchise fee and continuing royalty payments.
To qualify for the incentives, the Bonchon restaurant must open to the general public and begin regular operations no later than its Scheduled Opening Date, as specified in Section 6.01 of the Area Development Agreement. The franchisee must also fulfill all obligations under the New Marketing Plan for their restaurant, as detailed in Section 10.03 of the Franchise Agreement.
Furthermore, the franchisee must be in full compliance with the Franchise Agreement and all other agreements with Bonchon and its affiliates. Additionally, the Area Developer (and its approved affiliates operating franchised Businesses under the Area Development Agreement or otherwise) must be in full compliance with their respective Area Development Agreement, franchise agreements, and all other agreements with Bonchon and its affiliates. Failure to meet any of these conditions will result in the franchisee forfeiting their right to the incentives described in Sections 2 and 3 of the Rider, and they will be obligated to pay the standard Initial Franchise Fee and Continuing Royalty as set forth in Sections 5.01 and 5.02 of the Franchise Agreement. In such a case, the franchisee will be required to pay Bonchon the difference between the reduced Initial Franchise Fee ($20,000) and the standard Initial Franchise Fee, as well as the standard royalty fee of 5% of the Restaurant's prior week's Gross Revenues for the entire term of the Franchise Agreement.