For Bonchon franchises, can the value of employee discounts be credited against Gross Revenues when calculating the Continuing Royalty?

According to Bonchon's 2025 Franchise Disclosure Document, the value of employee discounts can be credited against Gross Revenues when calculating the Continuing Royalty. Specifically, the full value of meals furnished to employees as an incident to their employment is included within the definition of Gross Revenues. However, the value of any discounts extended to such employees may be credited against Gross Revenues during the week the meals were furnished. This credit is applied when determining the amount of Gross Revenues upon which the Continuing Royalty is based.

This provision benefits Bonchon franchisees by reducing the amount of Gross Revenues subject to the Continuing Royalty, which is a percentage of Gross Revenues paid to Bonchon. By allowing a credit for employee discounts, Bonchon effectively lowers the royalty burden on franchisees, incentivizing them to provide meals to employees. This can help with employee satisfaction and retention, indirectly benefiting the business.

It's important for prospective Bonchon franchisees to understand how Gross Revenues are defined and what deductions are permitted, as this directly impacts their royalty payments. Franchisees should keep accurate records of employee meals and discounts to ensure they can properly claim the credit. Additionally, franchisees should be aware that Bonchon may authorize other items to be excluded from Gross Revenues from time to time, but such permissions can be revoked in writing.