When does the tripled Continuing Royalty rate for a Bonchon franchise end if I am in default?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are operating your Bonchon Business while you are in default of any provision of the Franchise Agreement other than those defaults listed in Sections 17.01 or 17.02, the weekly Continuing Royalty rates above will be tripled (and will therefore be 15.0%) for each and every one of your operating Bonchon Businesses and Restaurants during a period beginning on the date you receive from us a written notice of default and ending on the date the default is fully cured.
Source: Item 6 — OTHER FEES (FDD pages 13–24)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if a franchisee is in default of any provision of the Franchise Agreement (excluding defaults listed in Sections 17.01 or 17.02), the weekly Continuing Royalty rate will be tripled. This means the royalty rate will increase from the standard 5.0% to 15.0% of the previous week's Gross Revenues.
The tripled Continuing Royalty rate applies to each of the franchisee's operating Bonchon Businesses and Restaurants. The increased royalty rate begins on the date the franchisee receives written notice of the default from Bonchon.
The tripled Continuing Royalty rate will remain in effect until the franchisee fully cures the default. Therefore, the period of the tripled royalty rate is directly tied to how quickly the franchisee addresses and resolves the default situation.