What is the range for the Area Development Fee that a Bonchon franchisee can expect to pay?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
| (1) Type of expenditure | (2) Amount | (3) Method of payment | (4) When due | (5) To whom payment is to be made |
|---|---|---|---|---|
| Area Development Fee | $45,000- $125,000 See Item 5 and Note 1 | Lump Sum | At signing of Area Development Agreement | Us |
| Professional Fees – Legal | $2,000- $5,000 See Note 2 | As third party specifies | As Incurred | Attorney/ Accountant |
| TOTAL | ||||
| $47,000 | ||||
| to | ||||
| $130,000 | ||||
| (Note | ||||
| 3) |
Notes
- [1] If you sign an Area Development Agreement with us, then you will pay an Area Development Fee to us in full when you sign the Area Development Agreement. The Area Development Fee is equal to (i) the Initial Franchisee Fee for the first Bonchon Business that you will develop and (ii) a Deposit Fee of $10,000 for each subsequent Bonchon Business you wish to develop, and therefore varies depending on the number of Bonchon Businesses you agree to open within your Development Territory (as defined in the Area Development Agreement). The Area Development Fee is fully earned when paid and it is not refundable under any circumstances. The low end of the Area Development Fee is for the development of 2 Bonchon Businesses and the high end is for the development of 10
Source: Item 7 — ESTIMATED INITIAL INVESTMENT YOUR ESTIMATED INITIAL INVESTMENT\ (FDD pages 24–37)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the Area Development Fee varies based on the number of Bonchon restaurants a franchisee commits to opening within their designated Development Territory. The fee is calculated as the Initial Franchise Fee for the first restaurant, plus a $10,000 deposit for each additional restaurant planned. The FDD states that the low end of the Area Development Fee covers development of 2 Bonchon Businesses and the high end covers development of 10 Bonchon Businesses, but this is not a maximum.
To illustrate, if a franchisee commits to developing two Bonchon restaurants, they would pay the Initial Franchise Fee for the first restaurant (which is $35,000 if it falls within the first five restaurants in the development schedule) plus a $10,000 deposit for the second restaurant, totaling $45,000. For a commitment to develop ten restaurants, the franchisee would pay the Initial Franchise Fee for the first restaurant (again, $35,000 if it falls within the first five restaurants in the development schedule) plus a $10,000 deposit for each of the nine additional restaurants, totaling $125,000.
It's important to note that the Area Development Fee is fully earned by Bonchon upon payment and is non-refundable under any circumstances. This means that even if the franchisee is unable to open all of the committed restaurants, the Area Development Fee will not be returned. The Area Development Deposit paid for each restaurant will be applied as a credit against the Initial Franchise Fee at the time the Franchise Agreement for that particular restaurant is signed.