Can Pepsi-Cola/PepsiCo offset payments due to a Bonchon franchisee for balances due under separate service agreements with Pepsi-Cola and/or its subsidiaries and affiliates?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Pepsi-Cola/PepsiCo has and reserves the right to withhold payments due hereunder as an offset against:
- (i) amounts not paid by Participating Franchisee for Postmix Products [and any PepsiCo products, if any] purchased from Pepsi-Cola/PepsiCo hereunder; and
- (ii) amounts not paid by Participating Franchisee for Packaged Products purchased from Bottler(s) hereunder;
- (iii) any and all balances due and payable to Pepsi-Cola/PepsiCo and Bottlers hereunder; and
- (iv) any and all balances due and payable under any separate services agreement between Participating Franchisee and Pepsi-Cola and/or its subsidiaries and affiliates.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Pepsi-Cola/PepsiCo reserves the right to offset payments due to a Bonchon franchisee under their agreement. This offset can be applied against several types of debts the franchisee may owe.
Specifically, Pepsi-Cola/PepsiCo can withhold payments to cover amounts not paid by the franchisee for postmix products or any PepsiCo products purchased under their agreement. This also extends to amounts not paid for packaged products bought from bottlers under the agreement. Furthermore, the offset can be used for any and all outstanding balances owed to Pepsi-Cola/PepsiCo and its bottlers under the agreement.
Most importantly, Pepsi-Cola/PepsiCo can offset payments for any balances due under separate service agreements between the Bonchon franchisee and Pepsi-Cola and/or its subsidiaries and affiliates. This means that if a franchisee has outstanding debts with Pepsi-Cola or its related entities through other agreements, Pepsi-Cola can deduct those amounts from payments they owe to the franchisee under the primary agreement. This clause gives PepsiCo a strong mechanism to ensure all debts are settled, potentially impacting the franchisee's cash flow if such offsets occur.