Does a Bonchon franchisee receive compensation for sales made by Bonchon or its affiliates to National, Regional and Institutional Accounts?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
You further agree that, both within and outside of the Protected Territory, we and/or our affiliates alone have the right to sell Bonchon System products and services to national, regional and institutional accounts, even when they are situated proximate to, adjacent to or abutting the boundary of your Protected Territory. "National, Regional and Institutional Accounts" are organizational or institutional customers, including (by way of example only): business entities; government agencies, branches or facilities; guest lodging networks; healthcare networks; and, the military. Only we will have the right to enter into contracts with National, Regional and/or Institutional Accounts (which may include facilities within your Protected Territory). If we receive orders for any Bonchon products or services calling for delivery or performance in your Protected Territory as a result of our engaging in commerce with National, Regional and Institutional Accounts, then we will have the right, but not the obligation, either to require you to fulfill the orders at the price we agree on with the customer or to give you the opportunity to fulfill the orders at the price we agree on with the customer. If we give you the opportunity to fulfill an order and if, for any reason, you do not desire to or cannot serve the customer, or if the customer desires for any or no reason to deal exclusively with us, our affiliate or another franchisee and not with you, then we, our affiliate or any other Bonchon franchisee may serve the customer within your Protected Territory, and you will not be entitled to any compensation.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, franchisees typically do not receive compensation for sales that Bonchon or its affiliates make to National, Regional, and Institutional Accounts, even if these accounts are within the franchisee's protected territory or development territory. These accounts are defined as organizational or institutional customers such as business entities, government agencies, lodging and healthcare networks, and the military, whose presence extends beyond the franchisee's territory. Bonchon retains the exclusive right to contract with these National, Regional, and Institutional Accounts.
However, if Bonchon receives orders from these accounts that require fulfillment within a franchisee's protected or development territory, Bonchon has the option, but not the obligation, to offer the franchisee the opportunity to fulfill the order at the price Bonchon has agreed upon with the customer. If the franchisee declines or cannot fulfill the order, or if the customer prefers to deal directly with Bonchon or another franchisee, Bonchon or another franchisee may serve the customer, and the original franchisee will not receive any compensation.
This policy emphasizes Bonchon's control over large accounts and alternate distribution channels, ensuring consistency and potentially leveraging economies of scale. For a prospective franchisee, this means that while they may have the opportunity to fulfill orders from major accounts in their area, they cannot rely on these sales as a guaranteed revenue stream. The franchisee's focus should be on building local business and customer relationships, as Bonchon retains the flexibility to manage national and regional accounts independently. This arrangement could limit a franchisee's revenue potential but also reduces the burden of managing complex, large-scale accounts.