In the event of early termination of the Bonchon Pepsi-Cola agreement, what is the Participating Franchisee required to do with any Packaged Products Equipment provided by individual Bottlers?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
tered into a further agreement with Pepsi-Cola for the purchase of Products, Participating Franchisee will immediately, to be received by Pepsi-Cola and Bottlers no later than thirty (30) days following expiration:
- (i) Make a payment to Pepsi-Cola reflecting reimbursement for all funding previously advanced by Pepsi-Cola or the Bottlers but not earned by the Participating Franchisee pursuant to the terms of this Agreement, if any; and
- (ii) Surrender to Pepsi-Cola any fountain dispensers or other components of Equipment for which Participating Franchisee is notified by Pepsi-Cola that it seeks to retain title, and make a payment to Pepsi-Cola reflecting reimbursement to Pepsi-Cola for the current unamortized book value of components of Equipment for which Pepsi-Cola elects not to retain title (as reasonably determined by Pepsi-Cola, applying generally accepted accounting principles using 10 year straight line depreciation methodology). Upon receipt of the foregoing amount from Participating Franchisee, Pepsi-Cola will transfer legal title to remaining on-premise components and/or units of Equipment to Participating Franchisee; and
- (iii) Surrender to individual Bottlers any and all units of Packaged Products Equipment provided by such Bottlers.
7.4. Transition Period
Upon termination or expiration of this Agreement, if Participating Franchisee has not entered into a further agreement with Pepsi-Cola for the purchase of Products, Pepsi-Cola and the Bottlers may, upon request by the Participating Franchisee, continue to provide Products to the Participating Franchisee to ensure the uninterrupted supply of beverages, for a transition period not to exceed one hundred twenty (120) days (unless otherwise mutually agreed upon) following expiration or termination of the Agreement (the "Transition Period").
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, upon termination or expiration of the Pepsi-Cola agreement, Bonchon franchisees must provide Pepsi-Cola and its Bottlers with reasonable access to the Outlets to remove equipment provided for the distribution and display of Packaged Products. This access must be free from any claims of trespass and scheduled by mutual agreement.
This means that if a Bonchon franchisee's agreement with Pepsi-Cola ends, whether through termination or expiration, the franchisee is obligated to allow Pepsi-Cola and its bottling partners to enter the restaurant to take back any equipment used for serving Pepsi products. This includes providing access to the premises at a mutually agreed-upon time and ensuring that Pepsi-Cola and the Bottlers are not subject to any legal claims of trespassing while they are removing the equipment.
Even during a transition period of up to 120 days after the agreement ends, the franchisee can continue to purchase Pepsi products to ensure an uninterrupted supply of beverages. However, the franchisee must still allow Pepsi-Cola and the Bottlers to remove their equipment during this time. The equipment may only be used to display and/or dispense Pepsi-Cola beverage products, even during the transition period where permitted by applicable local law, unless specifically agreed otherwise in writing by Pepsi-Cola.