factual

As a Bonchon franchisee, am I required to designate Pepsi-Cola and its bottlers as the exclusive suppliers for all beverages?

Bonchon Franchise · 2025 FDD

Answer from 2025 FDD Document

oducts (except for certain SKUs that may have limited availability) shall be available for delivery to the Outlets by direct-store-delivery via individual local bottlers under license from PepsiCo. Notwithstanding the foregoing, to the extent requested by Participating Franchisee, Pepsi-Cola will deliver Postmix Products to Participating Franchisee's designated foodservice distributors; provided, however, that in limited geographies, Pepsi-Cola reserves the right to distribute the Postmix Products to affected Outlets through Bottlers. In the event that a foodservice distributor does not carry the Postmix Products, Pepsi-Cola will use commercially reasonable efforts to gain their agreement to carry such products. Failing such agreement, affected Outlets will either designate another foodservice distributor or accept delivery from Bottlers.

Unless otherwise mutually agreed upon, the Packaged Products shall be purchased only from Bottlers, where available, in whose territories the affected Outlets are located and with whom such Bottler may require Participating Franchisee to execute a separate written agreement, which Packaged Products shall be purchased for on-premise resale by Participating Franchisee to its individual consumers and patrons.

3. Exclusivity

Pepsi-Cola will be the exclusive non-alcoholic beverage supplier to the Participating Franchisee during the Term, and except as provided below, the Products will be the exclusive beverage products of their respective types and categories sold, dispensed or otherwise made available, or in any way advertised, displayed, or promoted at or in connection with the Outlets by any method or through any medium whatsoever (including, without limitation, print, television, radio, internet, coupons, in-store displays and signage). In the event that Participating Franchisee determines to offer beverages in the Outlets beyond those listed in Section 7.2, such further beverages may only be Products which Pepsi-Cola or the Partnership offer for sale during the Term. Nothing herein will be construed to authorize Participating Franchisee to sell any beverage owned or manufactured by the Coca-Cola Company and its affiliates, bottlers, distributors, subsidiaries and joint ventures.

Notwithstanding the foregoing, Participating Franchisee may offer Dr Pepper (regular flavor only) on 1 valve of Equipment as a fountain beverage in the Outlets during the Term, provided the Participating Franchisee purchases its requirements of Permitted Product from the same source (foodservice distributor or local Bottler)

as the Participating Franchisee purchases the Fountain Products. Notwithstanding the foregoing, if the Permitted Product is not available from the local Bottler, Participating Franchisee may purchase its requirements of Permitted Product from a third-party foodservice distributor, even if Participating Franchisee purchases Fountain Products from the local Bottler ("Permitted Product").

Source: Item 23 — RECEIPTS (FDD pages 92–536)

What This Means (2025 FDD)

According to Bonchon's 2025 Franchise Disclosure Document, as a franchisee, you are generally required to designate Pepsi-Cola and its bottlers as the exclusive suppliers for all non-alcoholic beverages. Bonchon requires that Pepsi-Cola be the exclusive non-alcoholic beverage supplier during the term of the agreement. The beverages provided by Pepsi-Cola must be the only ones sold, dispensed, advertised, displayed, or promoted at the Bonchon outlet. This exclusivity extends to all forms of advertising and promotion.

However, there are some exceptions to this exclusivity. A Bonchon franchisee may offer Dr Pepper (regular flavor only) on one valve of the equipment as a fountain beverage, provided it is purchased from the same source as other fountain products (either a foodservice distributor or a local bottler). If the local bottler does not carry Dr Pepper, the franchisee can purchase it from a third-party foodservice distributor, even if the other fountain products are purchased from the local bottler.

Bonchon also states that if a franchisee decides to offer frozen beverage products, they must purchase suitable postmix products sold under PepsiCo trademarks directly from Pepsi-Cola. These PepsiCo products must be the exclusive frozen beverage products offered at the outlet. During the transition period after the agreement expires or terminates, the franchisee is not required to comply with the exclusivity requirements, unless otherwise agreed in writing with Pepsi-Cola.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.