Does a Bonchon developer receive an exclusive Development Territory under the Area Development Agreement?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
If you and we sign an Area Development Agreement, we will grant you a "Development Territory" and you will promise to develop, own and operate franchised Bonchon Businesses within the Development Territory. You will not receive an exclusive Development Territory. You may face competition from outlets that we own at nontraditional locations, from other channels of distribution or competitive brands that we control. Your Development Territory will be set forth on Exhibit A to your Area Development Agreement. The Development Territory includes the Protected Territories granted under the Franchise Agreement for each Bonchon Business that you develop. Each "Protected Territory" is restricted to a geographic area within which you agree to establish and operate a Bonchon Restaurant under a Franchise Agreement. Except in high-density population centers, a Restaurant's Protected Territory consists of the area inside a circle whose center lies at the Bonchon Restaurant Location and whose radius extends outward from the circle's center. The Protected Territory for your Bonchon Business depends on your market area, including population density, drive times, and similar factors. There is no set minimum or maximum Protected Territory. However, we do not anticipate (as a general rule) that the radius will ever be greater than 3 miles from the Bonchon Business or, less than 0.25 miles. If your Bonchon Business will be a Remote Kitchen Restaurant, your Protected Territory will be no greater than a one-tenth (0.1) mile radius from the Bonchon Business. Your Restaurant's specific Protected Territory will be somewhere in that range depending on your specific market and circumstances. For Restaurants located in high-density population centers, your Protected Territory will be determined on a case-by-case basis. Your right to operate a franchised Bonchon Business developed under an Area Development Agreement will be limited to the Bonchon Business' Restaurant Location situated in the respective Protected Territory located in the Development Territory. We do not approve or disapprove of the site for your first Restaurant Location under the Area Development Agreement, we do this under, and pursuant to the terms and conditions set forth in, the unit Franchise Agreement and in accordance with our then-current standards imposed in connection with same. However, we do approve and disapprove the sites for your subsequent Restaurant Locations pursuant to the terms and conditions set forth in, the Area Development Agreement and in accordance with our then-current standards imposed in connection with same. See the description of the Franchise Agreements above in this Item 12.
Source: Item 12 — TERRITORY (FDD pages 60–65)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if a franchisee and Bonchon sign an Area Development Agreement, Bonchon will grant the franchisee a Development Territory. However, the franchisee will not receive an exclusive Development Territory.
Bonchon retains the right to operate outlets at nontraditional locations and through other channels of distribution, and also to introduce competitive brands within the Development Territory. The specific Development Territory will be detailed in Exhibit A of the Area Development Agreement and includes the Protected Territories granted under the Franchise Agreement for each Bonchon Business developed.
The Protected Territory for each Bonchon restaurant is typically a circle centered on the restaurant location. The radius is usually between 0.25 and 3 miles, but this can vary based on market conditions like population density and drive times. For Remote Kitchen Restaurants, the Protected Territory is smaller, with a radius of no more than 0.1 miles. In high-density population centers, the Protected Territory is determined on a case-by-case basis. The franchisee's right to operate is limited to the restaurant location within its Protected Territory inside the Development Territory.