Is Bonchon required to ensure that expenditures by the Regional Advertising Cooperative are proportional to the contributions made by individual franchisees?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Expenditures by the Regional Advertising Cooperative need not be in proportion to the contributions you make (or any other franchisee makes). Bonchon Businesses which we or our affiliates have or may in the future establish and operate may (but are not required to) contribute to the Advertising Cooperative in the area in which the Bonchon Businesses are located.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 45–60)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, expenditures by the Regional Advertising Cooperative are not required to be proportional to the contributions made by individual franchisees. Bonchon determines the area of each Advertising Cooperative based on what it considers likely to be able to advertise effectively on a cooperative regional basis.
Bonchon retains the authority to form, change, dissolve, or merge these cooperatives. Franchisees are required to contribute between 1% and 4% of Gross Revenues, although the Cooperative can change the maximum contribution under its By-Laws. Bonchon Businesses, including those owned by its affiliates, may contribute to the Advertising Cooperative in the area in which they are located, but they are not required to do so.
This means that a Bonchon franchisee cannot expect that the amount they contribute to the Regional Advertising Cooperative will directly correlate with the advertising expenditure in their specific area. The advertising funds may be used at Bonchon's discretion to enhance, promote, and/or protect the Bonchon system, and expenditures need not be equivalent or proportionate to individual franchisee contributions.