Can Bonchon expend monies from the Bonchon System Brand Fund for reasonable administrative costs and overhead?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
We may, however, expend monies from the Bonchon System Brand Fund for any reasonable administrative costs and overhead that we may incur in activities reasonably related to the administration or direction of the Fund and advertising programs for franchisees including, without limitation, preparing marketing and advertising materials; working with advertising agencies, advertising placement services and creative talent; collecting Fund contributions and preparing an accounting of contributions to the Bonchon System Brand Fund and the annual statement of Fund contributions and expenditures provided for below; the Fund's administrative costs; travel expenses of personnel while they are on Fund business; meeting costs, including franchisee conferences; overhead relating to Fund business; a management fee for us (or an affiliate); and other expenses we incur in activities reasonably related to administering or directing the Fund and its programs, including taxes we must pay on Fund contributions we receive; conducting market research, public relations, and creating, preparing, and producing advertising, promotions, and marketing materials; and, otherwise devoting our personnel, resources and/or funds for the benefit of the Bonchon System Brand Fund.
Our right to expend monies from the System Advertising Fund to reimburse us for such activities is exclusive of any advertising agency fees which the Fund must expend to secure the services of an advertising agency or to have print, broadcast or internet advertising placed by an agency.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Bonchon can expend monies from the Bonchon System Brand Fund for reasonable administrative costs and overhead. These costs must be related to the administration or direction of the Fund and advertising programs for franchisees.
Examples of reasonable administrative costs and overhead include preparing marketing and advertising materials, working with advertising agencies, advertising placement services and creative talent, and collecting Fund contributions. It also covers preparing an accounting of contributions to the Bonchon System Brand Fund and the annual statement of Fund contributions and expenditures. Other expenses include the Fund's administrative costs, travel expenses of personnel on Fund business, meeting costs (including franchisee conferences), and overhead relating to Fund business.
Bonchon may also use the funds for a management fee for themselves or an affiliate, taxes paid on Fund contributions, conducting market research, public relations, and creating, preparing, and producing advertising, promotions, and marketing materials. Additionally, it covers devoting personnel, resources and/or funds for the benefit of the Bonchon System Brand Fund. However, the right to expend monies from the System Advertising Fund to reimburse Bonchon for such activities is exclusive of any advertising agency fees which the Fund must expend to secure the services of an advertising agency or to have print, broadcast or internet advertising placed by an agency.