What criteria define a "Mature Franchised Restaurant" for Bonchon, and what are the specific reasons a Bonchon restaurant would be excluded from this definition?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
We set forth below certain historic financial performance information of franchised Bonchon Restaurants open and operating for a full twelve (12) month period during the 2024 calendar year (each a "Mature Franchised Restaurant"). Excluded from the "Mature Franchised Restaurant" definition and the financial performance representation set forth in the table immediately below are those franchised Bonchon Restaurants that operated for less than twelve (12) months in the reported calendar year (whether as a result of the franchised Bonchon Restaurant (i) commencing operations in the midst of the reported calendar year, (ii) temporarily closing for a portion of the reported year for more than 14 consecutive days or operating less than 300 days or (iii) permanently closing after the start of the reported calendar year).
There was a total of 143 franchised Bonchon Restaurants open and operating as of the close of the 2024 fiscal year. In Section I below, we set forth the historic performance information of the 123 franchised Bonchon Restaurants that qualify as Mature Franchised Restaurants.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 81–84)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a "Mature Franchised Restaurant" is defined as a franchised Bonchon restaurant that has been open and operating for a full twelve (12) month period during the 2024 calendar year. This definition is used to provide financial performance information in Item 19 of the FDD. The financial data presented for these Mature Franchised Restaurants is based on weekly royalty reports submitted by franchisees and information polled from point-of-sale systems in the Restaurants. Bonchon has not independently audited this information, and written substantiation of the financial data will be made available upon reasonable request. As of December 31, 2024, there were 123 restaurants that met the criteria of a Mature Franchised Restaurant.
For the purposes of the financial performance representation, Bonchon excludes certain franchised restaurants from the definition of a Mature Franchised Restaurant. Specifically, any Bonchon restaurant that operated for less than twelve months during the 2024 calendar year is excluded. This exclusion applies if the restaurant (i) commenced operations during the middle of the year, (ii) temporarily closed for more than 14 consecutive days or operated less than 300 days, or (iii) permanently closed after the start of the calendar year.
The exclusion of these restaurants is important because the financial performance data presented in Item 19 is intended to give prospective franchisees an idea of what they might expect to earn. Including restaurants that were not open for the entire year could skew the data and provide a less accurate picture of potential performance. Therefore, Bonchon only includes restaurants that meet the Mature Franchised Restaurant criteria to ensure the financial performance representation is as reliable as possible. A prospective franchisee should consider these criteria when evaluating the financial performance data and understand that their individual results may differ.