Does the Bonchon financial performance representation include deductions for cost of sales and operating expenses to determine net income or profit?

According to Bonchon's 2025 Franchise Disclosure Document, the financial performance representations provided do not account for deductions related to the cost of sales, operating expenses, or other costs necessary to determine net income or profit. This means that the gross revenue or gross sales figures presented in Item 19 do not reflect the actual profitability a franchisee might experience.

For a prospective Bonchon franchisee, this is a critical point to consider. The financial performance representations offer only a partial picture, focusing on revenue without detailing the expenses required to generate that revenue. Therefore, it is essential for potential franchisees to conduct their own thorough and independent investigation into all costs and expenses associated with operating a Bonchon franchise.

To gain a clearer understanding of potential profitability, Bonchon recommends that prospective franchisees consult with current or former franchisees listed in the disclosure document. These individuals can provide valuable insights into the actual costs involved in running a Bonchon business, helping potential franchisees develop a more realistic financial forecast. This is a common practice in franchising, as franchisors often provide revenue figures, but franchisees must determine their own potential profitability by carefully estimating expenses.