Does Bonchon require franchisees to participate in local advertising?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
ree to submit proof of your expenditures under the New Restaurant Marketing Plan.
After your obligations under the New Restaurant Marketing Plan have been fully satisfied and continuing through the end of your Bonchon Business' first full calendar year of operations, you agree to expend on average the greater of: $1,166 per month or 1% of the preceding month's Gross Revenues on Local advertising and promotion. Following your Bonchon Business' first full calendar year of operations and continuing for the remainder of the Initial Term of your Franchise Agreement, you agree to expend annually at least 2% of the previous year's Gross Revenues on Local advertising and promotion. "Local advertising and promotion" means the local or regional Advertising and promotional activities that we specify in our Manuals or otherwise, or approve in advance as provided in Section 10.02 of the Franchise Agreement, including, but not limited to, expenditures on television, radio, newspaper, magazines, out of home, posters, banners, brochure, direct mail, social media platforms such as Facebook, Instagram, yelp, and other digital platforms. For the avoidance of doubt, any expenditures you make on the following items shall not be applied towards and/or used to satisfy your New Restaurant Marketing Plan nor your minimum local advertising and promotional expenditure requirement: (1) an incentive program for your employees or agents; (2) charitable, political or other contributions or donations; (3) store fixtures or equipment; and/or (4) online business listings.
On or before January 15th of each year during the term of the Franchise Agreement, and at any other times that we may require, you will be required to furnish to us copies of all statements, invoices and checks issued during the preceding year showing that you have spent the required amounts for local advertising. You must also furnish to us an accurate accounting of all expenditures (including copies of invoices) for local advertising and promotion in the previous calendar year, at the same time that you submit the annual financial statements required by Section 11.01 of the Franchise Agreement. At any time, if you wish to receive support from us in regard to advertising, you must first comply with our procedure for audit of your local advertising expenditure (including providing copies of invoices for all advertising transactions, showing that you are making the required minimum efforts to maintain a market for your Restaurant). as a condition to our obligation to provide support to you in this regard.
Advertising Council
There is no advertising council composed of franchisees that advise us on advertising policies. However, we reserve the right to form, change, or dissolve a franchisee advertising council.
Other Advertising Information
There is no obligation for us to maintain any advertising program or to spend any amount on advertising in your geographic area. We may advertise using print, radio, digital and television, with local, regional and national coverage. We may employ both an in-house advertising department and national or regional advertising agencies.
You may develop advertising materials for your own use, at your own cost. As stated above, we must approve these advertising materials in advance and in writing, but if we do not respond within ten business days after receiving your proposed advertising material, the material is disapproved.
We may require you to, in any and all advertising, marketing and other promotional materials, feature the fact that franchises for Bonchon Restaurants are available, such notice to be in the form, style and placement we designate. You must furnish any and all such advertising, marketing and other promotional materials to us, electronically or in such other form we designate, prior to your use, with the express understanding that we may be legally required to file same with various state regulatory authorities, which filings you will be required to assent to in connection with entering into the Franchise Agreement.
Web Sites
We alone may establish, maintain, modify or discontinue all internet, worldwide web and electronic commerce activities pertaining to the Bonchon System. We may establish one or more websites accessible through one or more uniform resource locators ("URL's") and, if we do, we will design and provide for the benefit of your franchised Bonchon Business a "click through" subpage at each of these websites for the promotion of your Business.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, franchisees are required to participate in local advertising. After fulfilling the obligations of the New Restaurant Marketing Plan and continuing through the end of the first full calendar year of operations, franchisees must spend the greater of $1,166 per month or 1% of the preceding month's Gross Revenues on local advertising and promotion. Following the first full calendar year, franchisees must spend at least 2% of the previous year's Gross Revenues on local advertising and promotion annually for the remainder of the Initial Term.
Bonchon defines "local advertising and promotion" as local or regional advertising and promotional activities specified in their Manuals or approved in advance, including expenditures on television, radio, newspaper, magazines, out of home, posters, banners, brochures, direct mail, social media platforms like Facebook, Instagram, and Yelp, and other digital platforms. However, expenditures on employee incentive programs, charitable contributions, store fixtures or equipment, and online business listings do not count toward the minimum local advertising requirement.
Franchisees must provide Bonchon with copies of statements, invoices, and checks by January 15th each year, demonstrating they have spent the required amounts on local advertising. They must also furnish an accurate accounting of all local advertising and promotion expenditures from the previous calendar year when submitting their annual financial statements. Franchisees may receive credit toward their local advertising requirement for contributions made to an advertising cooperative.
Bonchon retains control over advertising content, requiring franchisees to submit all proposed advertising materials for approval before use, except for materials provided by Bonchon or previously approved. Approval can be withheld for any reason, and failure to respond within ten business days is deemed a denial. Franchisees must conduct all local advertising according to the requirements and procedures in Bonchon's Manuals, which may include restrictions on advertising to customers near other Bonchon restaurants. Bonchon may also require franchisees to include notice that Bonchon franchises are available in their advertising materials.