For Bonchon, how long does the initial term of the service agreement last?
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)
Based on the 2025 Bonchon Franchise Disclosure Document, the company entered into a 20-year non-exclusive license agreement on December 19, 2011, with Jin Duk Seo for the use of the registered name "Bonchon".
According to the FDD, this license agreement automatically renews for additional consecutive terms of 20 years after the initial 20-year term. This renewal is contingent upon mutual agreement between the parties involved.
Bonchon acquired the right to sell and operate Bonchon franchises in the United States of America, including the right to collect franchise fees, royalties, and other fees from franchisees, through this agreement. The company paid the Licensor an initial license fee of $10 as defined in the license agreement. On December 26, 2018, the Licensor assigned all rights, title and interest in the trademark to the Ultimate Parent and the Company entered into a new license agreement with the Ultimate Parent under the same terms.