Does the Bonchon Franchise Agreement Rider 2025 Existing Franchisee Development Incentive Program (Existing Area Developers) apply to all franchisees, or are there specific conditions that must be met?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Conditions. Area Developer acknowledges, understands and expressly agrees that for Area Developer (or its approved franchisee affiliate, as applicable) to receive the incentives described in Section 2 and 3 of this Rider for a Restaurant development under the Area Development Agreement, each of the following conditions must be satisfied:
- a. The subject Restaurant opens to the general public and commences regular operations no later than its Scheduled Opening Date as reflected in Section 6.01 of the Area Development Agreement;
- b. Area Developer is in full compliance with the Area Development Agreement and all other agreements with Franchisor and its affiliates: and
c. Area Developer (and each of its approved franchisee affiliates) operating franchised Businesses pursuant to the Area Development Agreement or otherwise (each, an "Affiliate Franchisee") is in full compliance with its respective franchise agreements and all other agreements with Franchisor or its affiliates.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the Franchise Agreement Rider – 2025 Development Incentive Program is not applicable to all franchisees. It is specifically designed for franchisees who are also Area Developers and meet certain conditions outlined in the rider and the Area Development Agreement. This incentive program is aimed at encouraging further development by existing Area Developers.
To be eligible for the incentives, Area Developers must meet specific conditions. These include opening the restaurant to the public by the scheduled opening date as specified in the Area Development Agreement. Furthermore, the Area Developer must be in full compliance with the Area Development Agreement and all other agreements with Bonchon and its affiliates. This ensures that only developers who are in good standing and meeting their existing obligations can benefit from the incentive program.
Additionally, any approved franchisee affiliates operating franchised businesses under the Area Development Agreement must also be in full compliance with their respective franchise agreements and all other agreements with Bonchon or its affiliates. Failure to meet any of these conditions results in the franchisee forfeiting their right to receive the incentives described in the rider. This means they would be obligated to pay the standard Initial Franchise Fee and Continuing Royalty rates as outlined in the standard Franchise Agreement, which are higher than the incentive rates. The incentives are also not transferrable, so if the franchisee transfers their franchise agreement, the incentives will immediately terminate.