When operating under an Area Development Agreement, when must a Bonchon franchisee designate an Area Manager in writing to Bonchon?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
If you operate under an Area Development Agreement, then prior to you (or your affiliates, collectively with you) opening your third Bonchon Business and Restaurant, you must designate in writing to us an Area Manager who will have the obligation to oversee operations of each Bonchon Restaurant that you or your affiliates own and operate. You must inform us in writing of your Area Manager and any replacement Area Manager. The Area Manager must be certified to manage multi-unit operations and must have attended and successfully completed our Initial Training Program (and such additional training that we may require). Your Area Manager may not hold any other position in your organization or in any business entity or in any of your Bonchon Businesses while he/she is serving as your Area Manager. Upon the death, disability or termination of employment of the Area Manager, for any cause or reason, you must immediately notify us, and designate and obtain our written approval of an interim or acting Area Manager and, no later than 10 days following the death, disability or termination of the predecessor Area Manager, you must designate a successor Area Manager. The requirement to designate an Area Manager prior to the opening of your (or your affiliates' collectively with you) third Bonchon Business applies whether the development of your third Bonchon Business is (i) pursuant to the Development Schedule in Section 6.01 of your Area Development Agreement, (ii) the result of your (or your affiliates) entering into separate unrelated unit franchise agreements, (iii) the result of your (or your affiliates') acquisition of existing Bonchon Businesses or (iv) the result of some combination of the foregoing.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 69–71)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if a franchisee operates under an Area Development Agreement, they must designate an Area Manager in writing to Bonchon prior to opening their third Bonchon Business and Restaurant. This Area Manager will be responsible for overseeing the operations of all Bonchon Restaurants owned and operated by the franchisee and their affiliates.
The designated Area Manager must be certified to manage multi-unit operations and must have successfully completed Bonchon's Initial Training Program, along with any additional training that Bonchon may require. Furthermore, the Area Manager is prohibited from holding any other position within the franchisee's organization, any other business entity, or any of the franchisee's Bonchon Businesses while serving as Area Manager.
In the event of the Area Manager's death, disability, or termination of employment, the franchisee must immediately notify Bonchon. They must then designate an interim or acting Area Manager and, within 10 days of the event, designate a successor Area Manager, obtaining Bonchon's written approval for both. This requirement to designate an Area Manager before opening the third Bonchon Business applies regardless of whether the development of the third business is according to the Development Schedule in the Area Development Agreement, through separate franchise agreements, acquisition of existing Bonchon Businesses, or a combination of these factors.