What exhibits to the Bonchon Disclosure Document contain the riders for the Area Development Agreement and Franchise Agreement related to the 2025 development incentive program?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
are not refundable.
To incentivize franchisees to open Restaurants in 2025, we currently offer a development incentive program. If you and we enter into an Area Development Agreement ("ADA") for three or more Restaurants on or before December 31, 2025 and you open a Restaurant under your ADA no later than the Scheduled Opening Date listed in the Area Development Agreement (, then for that ADA
Restaurant we will reduce: (i) the Initial Franchise Fee to $20,000 and (ii) the weekly Continuing Royalty rate to 2.5% of your previous week's Gross Revenues for the first full 12 months of operations, after which the weekly Continuing Royalty rate will be 5.0% of your previous week's Gross Revenues. In order to receive the foregoing incentives, you and we will enter into a rider to (i) your Area Development Agreement and (ii) the Franchise Agreement for each Restaurant you commit to develop under your Area Development Agreement. The forms of each rider are attached to the Disclosure Document as Exhibit G-3 and Exhibit G-2, respectively.
To incentivize existing franchisees to open Restaurants in 2025, we currently offer a development incentive program. If you and we enter into a Franchise Agreement on or before December 31, 2025 under an existing Area Development Agreement (the "Existing ADA") that was previously executed and you open the Restaurant no later than the Scheduled Opening Date listed in the Area Development Agreement, then for that Restaurant we will reduce: (i) the Initial Franchise Fee to $20,000 and (ii) the weekly Continuing Royalty rate to 2.5% of your previous week's Gross Revenues for the first full 12 months of operations, after which the weekly Continuing Royalty rate will be 5.0% of your previous week's Gross Revenues. In order to receive the foregoing incentives, you will enter into a rider to the Franchise Agreement for each Restaurant that you commit to develop under the Existing ADA. Our form of rider is attached to this Disclosure Docu
Source: Item 5 — INITIAL FEES (FDD pages 12–13)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the exhibits containing the riders for the Area Development Agreement and Franchise Agreement related to the 2025 development incentive program are detailed in Item 5. Specifically, to incentivize franchisees to open restaurants in 2025, Bonchon offers a development incentive program.
For new Area Development Agreements, if a franchisee and Bonchon enter into an Area Development Agreement for three or more restaurants on or before December 31, 2025, and the franchisee opens a restaurant under the ADA by the Scheduled Opening Date, Bonchon will reduce the Initial Franchise Fee to $20,000 and the weekly Continuing Royalty rate to 2.5% of the previous week's Gross Revenues for the first 12 months. After this period, the royalty rate will revert to 5.0%. To formalize these incentives, a rider to the Area Development Agreement is included as Exhibit G-3, and a rider to the Franchise Agreement for each restaurant developed under the ADA is included as Exhibit G-2.
For existing franchisees under an existing Area Development Agreement, if a Franchise Agreement is entered into on or before December 31, 2025, and the restaurant opens by the Scheduled Opening Date, the Initial Franchise Fee is also reduced to $20,000, and the weekly Continuing Royalty rate is 2.5% for the first 12 months, then 5.0% thereafter. The rider to the Franchise Agreement for these existing ADA scenarios is attached as Exhibit G-1. Therefore, prospective franchisees should review Exhibits G-1, G-2, and G-3 to fully understand the terms and conditions of the 2025 development incentive program riders.