If establishing each additional Restaurant under the Bonchon Area Development Agreement, is a franchisee required to sign the then-current Bonchon Franchise Agreement?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
For those who desire to operate two or more Bonchon Businesses and Restaurants within a defined Development Territory, we make available an Area Development program under which you must make a commitment to sign separate Franchise Agreements for, and open, at least two Bonchon Restaurants according to a Development Schedule (see the Area Development Agreement in Exhibit B to this Disclosure Document). If you commit to develop and operate multiple Bonchon Businesses and Restaurants, we may permit you to operate each Restaurant using only one of our four Restaurant Concepts or a combination of our four Restaurant Concepts. Upon establishing each additional Restaurant under the Area Development Agreement, you may be required to sign our then-current Franchise Agreement, which may materially differ from the current Franchise Agreement included within this Disclosure Document.
Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–10)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, franchisees entering into an Area Development Agreement may be required to sign the then-current Franchise Agreement when establishing each additional restaurant. This agreement could differ significantly from the initial Franchise Agreement included in the FDD.
This stipulation means that the terms and conditions under which a Bonchon franchisee operates their subsequent restaurants could change over time. These changes could encompass various aspects of the franchise agreement, such as fees, operational requirements, and brand standards. Therefore, franchisees need to stay informed about any updates to the Franchise Agreement and understand how these changes might affect their business.
Prospective Bonchon franchisees should carefully consider the potential implications of signing updated Franchise Agreements for each additional restaurant. It would be prudent to discuss with Bonchon the types of changes that have occurred in past updates to the agreement and to seek legal counsel to fully understand their rights and obligations under both the Area Development Agreement and any subsequent Franchise Agreements.