What non-alcoholic beverages are Bonchon franchisees required to exclusively purchase and serve at Restaurants under the Pepsi-Cola agreement?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
In January 2023, we entered into a beverage sales agreement with PepsiCo Sales, Inc. and Pepsi
Cola Advertising and Marketing Inc. (collectively referred to as "Pepsi-Cola"). Under that agreement, we agreed that Bonchon franchisees will be required to exclusively purchase and serve non-alcoholic beverages licensed by Pepsi-Cola and/or by the Pepsi/Lipton Tea Partnership ("Partnership") at the Restaurants. To assume this obligation, you must execute Pepsi-Cola's form of Participating Franchisee Agreement (a copy of which is attached as Exhibit I to this Disclosure Document). If you purchase a Restaurant from an existing franchisee that has yet to convert to exclusively purchasing and selling non-alcoholic beverages licensed by Pepsi-Cola and/or the Partnership, then you will have to undertake this obligation by entering into Pepsi-Cola's form of Participating Franchisee Agreement attached as Exhibit I to this Disclosure Document.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 37–42)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Bonchon franchisees are required to exclusively purchase and serve non-alcoholic beverages licensed by Pepsi-Cola and/or by the Pepsi/Lipton Tea Partnership at their restaurants. This requirement stems from a beverage sales agreement Bonchon entered into with PepsiCo Sales, Inc. and Pepsi Cola Advertising and Marketing Inc. in January 2023.
To comply with this obligation, new Bonchon franchisees must execute Pepsi-Cola's form of Participating Franchisee Agreement, a copy of which is included as Exhibit I in the FDD. If a franchisee purchases an existing Bonchon restaurant that has not yet converted to exclusively selling Pepsi-Cola and/or Partnership beverages, the new franchisee will also need to enter into Pepsi-Cola's Participating Franchisee Agreement.
This exclusive purchasing arrangement means that Bonchon franchisees cannot offer any non-alcoholic beverages that are not licensed by Pepsi-Cola or the Pepsi/Lipton Tea Partnership. This restriction impacts the franchisee's ability to choose beverage products based on local preferences or cost considerations, as they are bound by the agreement between Bonchon and Pepsi-Cola. Franchisees should carefully review Exhibit I to fully understand their obligations under the Pepsi-Cola Participating Franchisee Agreement.