What conditions must be met to receive the Bonchon 2025 development incentive program for Area Development Agreements?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
are not refundable.
To incentivize franchisees to open Restaurants in 2025, we currently offer a development incentive program. If you and we enter into an Area Development Agreement ("ADA") for three or more Restaurants on or before December 31, 2025 and you open a Restaurant under your ADA no later than the Scheduled Opening Date listed in the Area Development Agreement (, then for that ADA
Restaurant we will reduce: (i) the Initial Franchise Fee to $20,000 and (ii) the weekly Continuing Royalty rate to 2.5% of your previous week's Gross Revenues for the first full 12 months of operations, after which the weekly Continuing Royalty rate will be 5.0% of your previous week's Gross Revenues. In order to receive the foregoing incentives, you and we will enter into a rider to (i) your Area Development Agreement and (ii) the Franchise Agreement for each Restaurant you commit to develop under your Area Development Agreement. The forms of each rider are attached to the Disclosure Document as Exhibit G-3 and Exhibi
Source: Item 5 — INITIAL FEES (FDD pages 12–13)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, to qualify for the development incentive program for Area Development Agreements (ADA), several conditions must be met. The franchisee and Bonchon must enter into an Area Development Agreement for three or more restaurants on or before December 31, 2025. Additionally, the franchisee must open a restaurant under the ADA no later than the Scheduled Opening Date listed in the Area Development Agreement. If these conditions are met, the initial franchise fee is reduced to $20,000, and the weekly continuing royalty rate is reduced to 2.5% of the previous week's gross revenues for the first 12 months of operation. After this initial period, the weekly continuing royalty rate will be 5.0%.
To formalize the incentive, both the franchisee and Bonchon will need to enter into a rider to both the Area Development Agreement and the Franchise Agreement for each restaurant the franchisee commits to develop under the ADA. The forms for these riders are included in the Disclosure Document as Exhibit G-3 and Exhibit G-2, respectively. This ensures that all parties are aligned and that the terms of the incentive are clearly documented and agreed upon.
This incentive program is designed to encourage franchisees to expand the Bonchon brand by developing multiple locations. By reducing the initial franchise fee and royalty rate for the first year, Bonchon aims to lower the initial financial burden on franchisees, making it more attractive for them to commit to developing multiple restaurants. This can be a significant benefit for franchisees looking to grow their business with Bonchon.