If a Bonchon franchisee requests an early replacement of equipment, how far in advance must the franchisee notify Pepsi-Cola in writing?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPTS]
4.2.2. EARLY REPLACEMENTS
If at any time during the Term subsequent to initial installation of any unit of Equipment (e.g., as a result of an Outlet remodeling/internal redesign/reconfiguration, etc.), Participating Franchisee requests that Pepsi-Cola replace Equipment prior to full amortization (as reasonably determined by Pepsi-Cola, applying generally accepted accounting principles using 10 year straight line depreciation methodology), then Participating Franchisee will notify Pepsi-Cola of such requests in writing and at least thirty (30) days in advance, and Pepsi-Cola may, in its sole discretion, elect to replace affected Equipment ("Early Replacement"). Upon notice of such Early Replacement(s), Participating Franchisee will cooperate with Pepsi-Cola and its Bottlers to provide access to such Outlet(s) to remove and replace Equipment and will surrender the pre-existing Equipment to be replaced.
In both Equipment Removal and Early Replacement scenarios above, Pepsi-Cola reserves the right to invoice Participating Franchisee immediately for (i) the current unamortized book value of such Equipment (as reasonably determined by Pepsi-Cola, applying generally accepted accounting principles using 10 year
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a franchisee must notify Pepsi-Cola in writing at least 30 days in advance if they request an early replacement of equipment. This notification is required if the franchisee wants Pepsi-Cola to replace equipment before it is fully amortized, as determined by Pepsi-Cola using generally accepted accounting principles and a 10-year straight-line depreciation method. Pepsi-Cola has the sole discretion to decide whether to proceed with the early replacement.
Upon providing notice for an early replacement, the Bonchon franchisee is expected to cooperate with Pepsi-Cola and its bottlers. This cooperation includes providing access to the relevant outlet to remove and replace the equipment. The franchisee must also surrender the existing equipment that is being replaced to Pepsi-Cola.
Bonchon franchisees should be aware that Pepsi-Cola reserves the right to immediately invoice the franchisee for the unamortized book value of the equipment (excluding fountain dispensers or units Pepsi-Cola wants to retain) plus the costs of removal and refurbishment. The franchisee is then required to pay this invoice in full within 30 days of the invoice date. This financial responsibility is a critical consideration for franchisees contemplating an early equipment replacement.