For Bonchon franchisees, what is the geographic scope of the performance requirements?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
lishment 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). If we receive orders for any Bonchon products or services calling for delivery or performance in your Development Territory as a result of our engaging in commerce with National, Regional and Institutional Accounts, and you have opened one or more Bonchon Businesses in the customer's geographic area, then we will have the right, but not the obligation, to give you the opportunity to fulfill one or more such orders at the price we agree on with the customer.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, franchisees must adhere to performance requirements both within and outside their Development Territory. Bonchon and its affiliates retain the exclusive right to sell Bonchon products and services to national, regional, and institutional accounts, irrespective of the franchisee's Development Territory boundaries. These accounts include entities with a presence extending beyond the franchisee's territory, such as businesses with multiple locations, government agencies, lodging networks, healthcare networks, and the military. Bonchon reserves the right to contract directly with these National, Regional, and Institutional Accounts, even if their facilities are located within a franchisee's Development Territory.
If Bonchon secures orders from National, Regional, or Institutional Accounts that require fulfillment within a franchisee's Development Territory, Bonchon has the option, but not the obligation, to allow the franchisee to fulfill the order at the price Bonchon has negotiated with the customer. However, if the franchisee does not have an operational Bonchon Business in the customer's geographic area, or if the franchisee is unable or unwilling to fulfill the order, or if the customer prefers to work directly with Bonchon or another franchisee, then Bonchon, its affiliate, or another franchisee may serve the customer within the original franchisee's Development Territory without any compensation to the original franchisee.
Bonchon franchise agreements do not grant franchisees exclusive marketing rights within their Development Territory. All Bonchon Businesses, whether company-owned, joint-ventured, or franchised, have the right to solicit, service, advertise, and offer their products and services to any individual or entity, regardless of geographic location, including within a franchisee's Development Territory. This means that a franchisee's performance is evaluated not only within their territory but also in the context of Bonchon's broader sales and marketing activities, including those targeting national accounts and those conducted by other Bonchon outlets.
This arrangement carries significant implications for prospective Bonchon franchisees. While a franchisee is granted a Development Territory, this does not guarantee exclusive rights to all customers within that territory. Bonchon retains the flexibility to serve national accounts and allow other franchisees to operate within the territory under certain conditions. Franchisees need to be prepared to compete with other Bonchon outlets and understand that their performance will be evaluated in relation to Bonchon's overall strategic objectives, which may extend beyond the confines of their immediate geographic area.