Can Bonchon require a Bonchon franchisee to implement Co-Branding at their franchised business?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to modifications of the Bonchon System, we may at times co-brand one or more restaurant concepts which we or our affiliates operate with Bonchon System Restaurants and/or offer for sale in Bonchon System Restaurants products sold in businesses operated by us and/or our affiliates (collectively, "Co-Branding"). This Co-Branding may involve changes to the Proprietary Marks, and may require you to modify the building and premises of your Bonchon System Restaurant and the furnishing, fixtures, equipment, signs and trade dress at your Bonchon System Restaurant. If you receive written notice of our institution of Co-Branding, you must implement the Co-Branding at your franchised Business. The Franchise Agreement does not place any limit on our rights to require you to make changes for Co-Branding.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 71)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Bonchon may require franchisees to implement co-branding at their franchised businesses. Bonchon may co-brand its restaurants with other restaurant concepts operated by Bonchon or its affiliates, or offer for sale in Bonchon restaurants products sold in businesses operated by Bonchon and/or its affiliates. This co-branding may involve changes to Bonchon's Proprietary Marks and may require franchisees to modify their building, premises, furnishings, fixtures, equipment, signs, and trade dress. Franchisees must implement the co-branding if they receive written notice from Bonchon. The Franchise Agreement does not limit Bonchon's right to require these changes for co-branding.
This means that Bonchon has the right to integrate other brands or products into the Bonchon franchise. This could involve significant changes to the restaurant's appearance and operations, potentially requiring additional investment from the franchisee. The franchisee has no say in whether or not co-branding is implemented if Bonchon decides to do so.
For a prospective franchisee, this clause represents a significant lack of control over the future direction of their business. While co-branding could potentially increase revenue, it also carries the risk of diluting the Bonchon brand or requiring costly renovations. It is important for potential franchisees to fully understand the implications of this clause and to consider the potential costs and benefits of co-branding before investing in a Bonchon franchise.