What is the required action for a Bonchon franchisee upon notification of a systemwide supply contract?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
other consideration payable or paid as a result of your purchases of non-proprietary goods, services or equipment be paid until further notice to the Bonchon System Brand Fund (to be expended as provided in this Agreement).
D. Systemwide Supply Contracts
We may, in the exercise of our business judgment, enter into supply contracts either for all Bonchon Businesses or a subset of Bonchon Businesses situated within one or more geographic regions (each, a "systemwide supply contract"). We may enter into systemwide supply contracts with one or more vendors of products, services or equipment that all company-owned and franchised Bonchon Restaurant Businesses in a geographic area will be required to purchase, use or sell. If we do so, then immediately upon notification, you, we and all other Bonchon Businesses in the geographic area must purchase the specified product, service or equipment only from the designated supplier. However, if at the time of our notification you are already a party to a non-terminable supply contract with another vendor or supplier for the product, service or equipment, then your obligation to purchase from our designated supplier under the systemwide supply contract will not begin until the scheduled expiration (or earlier termination) of your pre-existing supply contract.
We make no representation that we will enter into any systemwide supply contracts or other exclusive supply arrangements or, if we do so, that you would not otherwise be able to purchase the same products and/or services at a lower price from another supplier.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if Bonchon enters into a systemwide supply contract, franchisees must immediately purchase the specified product, service, or equipment only from the designated supplier upon notification. This mandate applies to all company-owned and franchised Bonchon Restaurant Businesses within the specified geographic area.
However, there is an exception: if a franchisee is already party to a non-terminable supply contract with another vendor or supplier for the same product, service, or equipment at the time of notification, the obligation to purchase from Bonchon's designated supplier will not begin until the pre-existing contract expires or is terminated earlier.
Bonchon retains the right to add, modify, substitute, or discontinue systemwide supply contracts or exclusive supply arrangements based on their business judgment. Bonchon does not guarantee that they will enter into any systemwide supply contracts or that franchisees will not be able to find the same products or services at a lower price from another supplier.