How is the Protected Territory determined for Bonchon Restaurants in high-density population centers?

According to Bonchon's 2025 Franchise Disclosure Document, the determination of a Protected Territory for restaurants located in high-density population centers is made on a case-by-case basis. This contrasts with the standard method used in less dense areas, where the Protected Territory is typically defined as the area within a circle centered on the Bonchon Restaurant location, with a radius extending outward. The FDD specifies that there is no set minimum or maximum Protected Territory, but it is generally not anticipated to be greater than 3 miles or less than 0.25 miles. For Remote Kitchen Restaurants, the protected territory is no greater than a one-tenth (0.1) mile radius from the Bonchon Business.

This case-by-case approach in high-density areas suggests that Bonchon takes into account various factors specific to those locations. These factors likely include population density, traffic patterns, the proximity of other businesses, and the potential for cannibalization between different Bonchon locations. This individualized assessment aims to balance the franchisee's need for a Protected Territory with Bonchon's overall growth strategy and market penetration.

For a prospective Bonchon franchisee, this means that the size and shape of their Protected Territory in a high-density area will be subject to negotiation and will depend heavily on the specific characteristics of their location. It is crucial for franchisees to thoroughly understand the factors that Bonchon considers when determining the Protected Territory and to negotiate for terms that provide adequate protection for their investment while still allowing for reasonable growth opportunities for the Bonchon brand as a whole. Franchisees should also inquire about the potential for non-traditional locations within or near their territory, as Bonchon retains the right to operate such locations without compensating the franchisee.