What was the initial license fee paid by Bonchon for the use of the registered name 'Bonchon'?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
221, $746,312 and $681,340 for the years ended December 31, 2024, 2023 and 2022, respectively.
NOTE 5. COMMITMENTS AND CONTINGENCIES
Operating leases
The Company had an operating lease for an office space in New York City that expired on May 31, 2023 and was not renewed. Total operating lease expense for the years ended December 31, 2023 and 2022, amounted to $99,552 and $238,926, respectively.
Supplemental cash flow information related to leases was as follows:
| 2024 | 2023 | |
|---|---|---|
| Cash paid for amounts included in | ||
| measuring operating lease | ||
| liabilities: | ||
| Operating cash flows from | ||
| operating leases | $ - | $ 112,460 |
| Variable lease payments | $ - | $ 2,408 |
| Weighted-average lease term and |
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the company entered into a 20-year non-exclusive license agreement on December 19, 2011, with Jin Duk Seo, the Licensor, for the use of the registered name "Bonchon." This agreement grants Bonchon the right to sell and operate franchises in the United States and to collect fees from franchisees. The license agreement is automatically renewable for additional 20-year terms unless otherwise agreed.
Per the license agreement, Bonchon paid the Licensor an initial license fee of $10. On December 26, 2018, the Licensor assigned all trademark rights to the Ultimate Parent, and Bonchon entered into a new license agreement with the Ultimate Parent under the same terms.
This initial license fee is notably low. It is important to note that this agreement was between related parties, which may explain the nominal fee. A prospective franchisee should be aware that this agreement allows Bonchon to use the trademark and system, which are critical components of the franchise offering.