How does the Bonchon franchisor's requirement for franchisees to use specific computer systems (mentioned implicitly in Item 11) relate to the calculation and reporting of Gross Revenues for the Continuing Royalty fee in Item 6?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
h the expenses we or our affiliates incur in providing upgraded or new technology to you.
Before the commencement of operation of the franchised Restaurant, you must purchase the required computer hardware, software, training service, Internet connections and service, required dedicated telephone and power lines, e-mail service, point of sale system, remote helpdesk service, secure payment service, back office equipment, online ordering system, gift card system, mobile ordering systems, order and pay kiosks, point of sale server ordering tablets, kitchen display systems, robotics, PCI compliance hardware and software, credit card processor, credit card chip reader, food
and labor cost management software, digital menu boards, burglar alarm , camera system, music audio and video system, security firewall and networks, network cabling, and other computer-related accessories, peripherals and equipment (the "Computer and Point of Sale System and Other Technology"). See Item 7 for the cost of the Computer and Point of Sale System and Other Technology. We will specify to you the technology stack for the Computer and Point of Sale System and Other Technology which we have negotiated with suppliers for your benefit. Bonchon will supply you with a franchise email address. This email must be used for all communications relating to or on behalf of your Bonchon Business.
You are currently required to use the NCR/Aloha point of sale system or any other system we may designate in the future or approve in advance. We estimate that the required Computer and Point of Sale System and Other Technology will cost from $20,000 to $50,000 for Dine-In Restaurants, Fast Casual, and Delivery and Carryout Only Restaurants; and from $10,000 to $20,000 for a Remote Kitchen Restaurant. If operating a Remote Kitchen Restaurant, you may be required to purchase a non-standard computer or point of sale system as determined by your lease. If your lease for your Remote Kitchen Restaurant requires that you purchase a different computer or point of sale system, then you will not have to purchase the Computer and Point of Sale System and Other Technology that we prescribe.
You must provide all assistance we require to bring your Computer and Point of Sale System and Other Technology on-line with our headquarters computer at the earliest possible time and to maintain this connection as we require. You must input and maintain in your Computer and Point of Sale System and Other Technology all data and information which we prescribe in our Manuals, in our proprietary software and manuals (if any), and otherwise. We may retrieve from your Computer and Point of Sale System and Other Technology all information that we consider necessary, desirable or appropriate. We will bear the telephone costs of this information retrieval. You must accurately, consistently and completely record, structure, capture and provide through the Computer and Point of Sale System and Other Technology all information concerning the operation of the franchised Business that we require, in the form and at the intervals that we require. If the lease for your Remote Kitchen Restaurant requires that you purchase a different computer and point of sale system than what we require, you agree to submit (in the form we prescribe) reports of your weekly Gross Revenues and such other information that we may require in our Manual or otherwise.
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the franchisor mandates the use of specific computer systems, including point-of-sale (POS) systems, which directly tie into the calculation and reporting of Gross Revenues, which in turn determines the Continuing Royalty fee. Bonchon requires franchisees to purchase a Computer and Point of Sale System and Other Technology before opening their restaurant. This system includes hardware, software, internet connections, and various other technology components specified by Bonchon.
The Gross Revenues, from which the Continuing Royalty is calculated, include all revenues and income from any source derived from the restaurant's operation, whether received in cash, services, or credit. The weekly Continuing Royalty is 5.0% of the previous week's Gross Revenues. Bonchon uses the data from the point-of-sale systems to obtain Gross Revenues information from franchisees' weekly royalty reports.
Bonchon may also impose a Technology Fee of up to 1.0% of monthly Gross Revenues to cover expenses related to providing upgraded or new technology. Furthermore, all Continuing Royalty payments must be made via electronic funds transfer or similar technology designated by Bonchon, with the franchisee bearing the costs of such transfers. The franchisor also provides standard electronic accounting forms and reports, if necessary, which further integrates the computer systems with financial reporting.
Therefore, the mandatory computer systems are integral to tracking, reporting, and paying the Continuing Royalty fee, as well as potentially incurring a Technology Fee, ensuring transparency and accuracy in financial reporting to Bonchon. The use of these systems allows Bonchon to monitor sales and calculate royalties efficiently, while also providing franchisees with tools for managing their business and financial data.