What is the definition of 'Nontraditional Locations' where Bonchon can establish businesses without compensating the franchisee?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
You also understand and agree that we and/or our affiliates alone have the right to offer and sell Bonchon System products and services at any and all nontraditional locations, including nontraditional locations situated in your Development Territory, through the establishment of Bonchon Businesses, kiosks, mobile units, concessions or "shop in shops", and that, by contrast, you are precluded from engaging in such activity. "Nontraditional Locations" includes sports arenas and venues; theatres; resorts; food retailers (including supermarkets, grocery stores and convenience stores); malls; schools and universities; hospital and healthcare facilities; airports; guest lodging facilities; day care facilities of any type; government facilities; condominium and cooperative complexes; the premises of any third party retailer which is not a Bonchon Business (including shops, stores and department stores); military bases and installations; airlines, railroads and other modes of mass transportation; and, any other location or venue to which access to the general public is restricted. You will receive no compensation for our or our affiliates' sales at Nontraditional Locations.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, 'Nontraditional Locations' are sites where Bonchon can establish businesses, such as restaurants, kiosks, or mobile units, without providing compensation to the franchisee, even if these locations are within the franchisee's Development Territory. These locations include sports arenas and venues, theaters, resorts, food retailers like supermarkets and convenience stores, malls, schools and universities, hospitals and healthcare facilities, airports, guest lodging facilities, day care facilities, government facilities, condominium and cooperative complexes, and premises of third-party retailers that are not Bonchon businesses, such as shops, stores, and department stores.
Additionally, nontraditional locations encompass military bases and installations, airlines, railroads, other modes of mass transportation, any location commonly known as a 'remote kitchen,' 'virtual kitchen,' 'ghost kitchen,' or other similar type of location that operates on a pick up and/or delivery only basis, and any other location or venue to which access to the general public is restricted. This means Bonchon retains the right to operate or authorize others to operate Bonchon businesses in these venues without sharing any revenue with the franchisee, regardless of proximity to the franchisee's territory.
For a prospective franchisee, this clause is significant because it clarifies that Bonchon retains considerable freedom to establish alternative outlets in various locations, including those within the franchisee's territory, without any obligation to compensate the franchisee for sales generated through these channels. This could potentially impact a franchisee's revenue if Bonchon establishes a presence in a nontraditional location within the franchisee's target market. It is important for potential franchisees to consider the implications of these non-traditional locations and how they might affect their business operations and revenue projections.