Does the Bonchon franchisee receive compensation for sales made by Bonchon or its affiliates through alternate channels of distribution within the Development Territory?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
ot). Our rights to engage in other business activities are specifically reserved and may not be qualified or diminished in any way by implication. We thus may engage in, or authorize others to engage in, any form of business offering and selling any type of product or service except as we are restricted by Section 3.02 of this Agreement. By way of example, we and/or our affiliates may own, operate or authorize others to own or operate any type of business at any location we choose, including within your Development Territory, so long as such other business does not sell under the Proprietary Marks the type of products or services which your Bonchon Businesses offer and sell (except as permitted below). Further, we and/or our affiliates may own, operate or authorize others to own or operate Bonchon Businesses at any location outside of your Development Territory (including immediately proximate thereto).
In addition, you understand and agree that we and/or our affiliates alone have the right to offer and sell within and outside your Development Territory, and under the Proprietary Marks, any and all products or services and/or components or ingredients thereof, (including those used or sold by your Bonchon Businesses), and whether or not a part of the Bonchon System, through any alternate channels of distribution, that is, any method of distribution other than a Bonchon Business situated within your Development Territory including, without limitation, the internet/worldwide web; any other form of electronic commerce; "800" or similar toll-free telephone numbers; mail order; catalogs; television sales (including "infomercials"); telemarketing or other direct marketing sales; or, any other channel of distribution whatsoever except for a Bonchon Business. You will not be entitled to any compensation in connection with these sales within your Development Territory.
You also understand and agree that we and/or our affiliates alone have the right to offer and sell Bonchon System products and services at any and all nontraditional locations, including nontraditional locations situated in your Development Territory, through the establishment of Bonchon Businesses, kiosks, mobile units, concessions or "shop in shops", and that, by contrast, you are precluded from engaging in such activity. "Nontraditional Locations" includes sports arenas and venues; theatres; resorts; food retailers (including supermarkets, grocery stores and convenience stores); malls; schools and universities; hospital and healthcare facilities; airports; guest lodging facilities; day care facilities of any type; government facilities; condominium and cooperative complexes; the premises of any third party retailer which is not a Bonchon Business (including shops, stores and department stores); military bases and installations; airlines, railroads and other modes of mass transportation; and, any other location or venue to which access to the general public is restricted. You will receive no compensation for our or our affiliates' sales at Nontraditional Locations.
You further agree that, both within and outside the Development Territory, we and/or our affiliates alone have the right to sell Bonchon System products and services to national, regional and
institutional accounts. "National, Regional and Institutional Accounts" are organizational or institutional customers whose presence is not confined to your Development Territory, including (by way of example only): business entities with offices or branches situated both inside and outside of your Development Territory; government agencies, branches or facilities; guest lodging networks; healthcare networks; the military; and, any other customer whose presence is not confined to your Development Territory. Only we will have the right to enter into contracts with National, Regional and Institutional Accounts (which may include facilities within your Development Territory).
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, franchisees will not receive compensation for sales made through alternate channels of distribution within their Development Territory. Bonchon and its affiliates have the exclusive right to offer and sell products or services through any distribution method other than a Bonchon restaurant in the Development Territory. These alternate channels include the internet, electronic commerce, toll-free telephone numbers, mail order, catalogs, television sales, telemarketing, and any other distribution channel except for a Bonchon restaurant.
Bonchon and its affiliates also have the right to offer and sell Bonchon System products and services at nontraditional locations, including those within the franchisee's Development Territory, without providing compensation to the franchisee. Nontraditional locations include venues like sports arenas, theaters, resorts, food retailers, malls, schools, universities, hospitals, airports, guest lodging facilities, day care facilities, government facilities, and military bases. This also extends to remote, virtual, or ghost kitchens operating on a pick-up and/or delivery basis.
Bonchon retains the right to sell to national, regional, and institutional accounts, even those located within a franchisee's protected territory, without any obligation to compensate the franchisee. If Bonchon receives orders from these accounts for delivery within the franchisee's territory, Bonchon has the option, but not the obligation, to allow the franchisee to fulfill the order at the agreed-upon price. However, if the franchisee cannot or does not want to fulfill the order, or if the customer prefers to deal directly with Bonchon or another franchisee, Bonchon or another franchisee may serve the customer without compensating the original franchisee. This lack of compensation for sales through alternative channels and nontraditional locations is a significant factor for prospective franchisees to consider, as it could impact their potential revenue.