What does the Bonchon Development Territory include?
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. Within this territory, the franchisee is obligated to develop, own, and operate franchised Bonchon Businesses. However, the Development Territory is not exclusive, meaning the franchisee may face competition from outlets Bonchon owns in nontraditional locations, other distribution channels, or competitive brands Bonchon controls. The specific boundaries of the Development Territory will be detailed in Exhibit A of the Area Development Agreement and include Protected Territories granted under the Franchise Agreement for each Bonchon Business developed.
Each Protected Territory is a defined geographic area where the franchisee agrees to establish and operate a Bonchon Restaurant under a Franchise Agreement. For most locations, the Protected Territory is a circle centered on the Bonchon Restaurant, with the radius extending outward. The size of the Protected Territory depends on market factors like population density and drive times, with no set minimum or maximum, but generally expected to be between 0.25 and 3 miles. 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 the Protected Territory inside the Development Territory.
Bonchon does not approve or disapprove the site for the first Restaurant Location under the Area Development Agreement but does approve sites for subsequent Restaurant Locations. Bonchon and its affiliates retain the right to operate any number of Bonchon Businesses, and authorize others to do so, at any location outside the Development Territory. Bonchon also reserves the right to sell Bonchon products and services to national, regional, and institutional accounts both within and outside the Development Territory. The Area Development Agreement does not provide marketing exclusivity, and all Bonchon Businesses can solicit and service customers regardless of location, including within the franchisee's Development Territory. Bonchon can also sell products through alternate channels of distribution, such as the internet, without compensating the franchisee.