What is the deadline to enter into an Area Development Agreement for three or more Restaurants to qualify for the Bonchon development incentive program?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisees who open Restaurants that qualify for our current development incentive program may benefit from certain incentives (see Item 5), one of which is that if you and we enter into an Area Development Agreement for three or more Restaurants on or before December 31, 2025 and you open an ADA Restaurant no later than the Scheduled Opening Date in the Area Development Agreement (, then for that ADA Restaurant we will reduce the Continuing Royalty rate to 2.5% for the first 12 months of operations, after which the Continuing Royalty rate will be 5.0%.
Source: Item 6 — OTHER FEES (FDD pages 13–24)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, to qualify for the development incentive program, a prospective franchisee must enter into an Area Development Agreement (ADA) for three or more restaurants on or before December 31, 2025. Additionally, the franchisee must open the ADA Restaurant no later than the Scheduled Opening Date outlined in the Area Development Agreement.
If these conditions are met, Bonchon will reduce the Continuing Royalty rate to 2.5% for the first 12 months of operation for that ADA Restaurant. After this initial period, the Continuing Royalty rate will revert to the standard 5.0%.
This incentive can significantly lower initial costs and improve profitability during the first year of operation for franchisees committing to area development. However, it's crucial to adhere to both the agreement deadline and the scheduled opening date to secure the reduced royalty rate.