When will a Bonchon franchisee be responsible for the architectural fees incurred to date per their architectural design services contract under the Bonchon Accelerated Architectural Services Program (BAASP)?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
If, however, you elect to cease lease negotiations and not execute the lease for your Restaurant Location because you refuse to (i) personally guaranty the terms of the lease or (ii) comply with a request from the landlord that would not (in our reasonable business judgment) impede your development and/or operation of your Restaurant, then you will be responsible for the architectural fees incurred to date per your architectural design services contract; provided that, the rent for your Restaurant Location is at or below market rate for the trade area and the estimated total development cost of the Restaurant falls within the cost range listed in the applicable table in Item 7 above.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 45–60)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a franchisee participating in the Bonchon Accelerated Architectural Services Program (BAASP) will be responsible for the architectural fees incurred to date under specific circumstances related to lease negotiations. This program aims to expedite restaurant development by allowing franchisees to start construction planning and permitting while negotiating their lease.
Specifically, the franchisee becomes responsible for the architectural fees if they elect to cease lease negotiations and do not execute the lease because they refuse to (i) personally guarantee the terms of the lease or (ii) comply with a landlord's request that Bonchon deems reasonable and not impeding on the restaurant's development or operation. This condition applies only if the rent for the restaurant location is at or below market rate for the trade area, and the estimated total development cost falls within the cost range outlined in Item 7 of the FDD.
In contrast, Bonchon will assume responsibility for paying the architectural fees if the lease is not executed due to the landlord withdrawing from the lease negotiation process. This distinction highlights the importance of franchisees understanding their obligations and the potential financial risks associated with lease negotiations under the BAASP program. Franchisees should carefully consider these conditions before participating in the program and make informed decisions during the lease negotiation process.