What are the conditions to receive the Bonchon 2025 development incentive program for existing Area Development Agreements?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
G-2, respectively.
To incentivize existing franchisees to open Restaurants in 2025, we currently offer a development incentive program. If you and we enter into a Franchise Agreement on or before December 31, 2025 under an existing Area Development Agreement (the "Existing ADA") that was previously executed and you open the Restaurant no later than the Scheduled Opening Date listed in the Area Development Agreement, then for that 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 will enter into a rider to the Franchise Agreement for each Restaurant that you commit to develop under the Existing ADA. Our form of rider is attached to this Disclosure Docu
Source: Item 5 — INITIAL FEES (FDD pages 12–13)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, existing franchisees with Area Development Agreements (ADA) can take advantage of a development incentive program under specific conditions. To qualify for the incentive, Bonchon requires that the franchisee and Bonchon enter into a Franchise Agreement on or before December 31, 2025, under an existing ADA that was previously executed. Additionally, the restaurant must open no later than the Scheduled Opening Date listed in the Area Development Agreement.
If these conditions are met, Bonchon will reduce the Initial Franchise Fee to $20,000 for that restaurant. Furthermore, the weekly Continuing Royalty rate will be reduced to 2.5% of the previous week's Gross Revenues for the first full 12 months of operation. After this initial period, the weekly Continuing Royalty rate will revert to 5.0% of the previous week's Gross Revenues.
To formally receive these incentives, the franchisee must enter into a rider to the Franchise Agreement for each restaurant they commit to develop under the Existing ADA. The form of this rider is included as Exhibit G-1 in the Disclosure Document. This incentive is designed to encourage existing franchisees to expand their operations within the Bonchon system.