Under the Bonchon Area Development Agreement, does Bonchon approve the site for the first Restaurant Location?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
If you sign an Area Development Agreement with us, then, under the Area Development Agreement, we will:
- (1) Designate your Development Territory, the number of Businesses you will open, and the development schedule setting the timetable you will follow for opening the Businesses, based on our mutual agreement. (Area Development Agreement, Section 3.01 and 6.01) You and we will decide on your Development Territory together, considering factors such as the general locations and neighborhoods and proximity to customers in the Development Territory we are considering; traffic patterns in the Development Territory; co-tenant attractiveness in the sites available in the Development Territory; size of the available spaces in the Development Territory; age and condition of the buildings in which the Restaurant Locations might be situated in the Development Territory being considered; the availability of locations and necessary zoning in the Development Territory; and, the location of competitors in the Development Territory. In deciding on the number of Bonchon Businesses and the development schedule for opening them, you and we will consider factors such as the potential total number of Businesses in the Development Territory; how aggressive the opening schedule should be; your experience, if any, in the industry; your experience in franchising; and, the capital commitment you are able and willing to make. If you and we do not agree on the Development Territory, the number of Businesses to be opened and the development schedule, then you and we will not sign an Area Development Agreement. We do not approve or disapprove of the site for your first Restaurant Location under the Area Development Agreement, we do this under, and pursuant to the terms and conditions set forth in, the unit Franchise Agreement and in accordance with our then-current standards imposed in connection with same. However, we do approve and disapprove the sites for your subsequent Restaurant Locations pursuant to the terms and conditions set forth in, the Area Development Agreement and in accordance with our then-current standards imposed in connection with same.
- (2) Under the Unit Franchise Agreements, approve or disapprove the sites you propose you for your Restaurant Locations within your Development Territory, perform the training, instruction, assistance and other activities and services for which the Franchise Agreements provide. (Area Development Agreement, Section 8.01).
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, under the Area Development Agreement, Bonchon does not approve or disapprove the site for the franchisee's first Restaurant location. Bonchon's approval of the site for the first Restaurant location occurs under the unit Franchise Agreement. However, Bonchon does approve or disapprove the sites for subsequent Restaurant locations under the Area Development Agreement.
Bonchon does provide site selection criteria and a site evaluation form. The franchisee must verify that their site complies with Bonchon's site selection criteria. The franchisee is required to utilize a Bonchon approved real estate broker and submit maps, completed checklists, photographs, copies of proposed leases, diagrams of the premises with measurements, and other information and materials which Bonchon may reasonably require to evaluate the proposed Restaurant Location.
Bonchon offers a Bonchon Accelerated Architectural Services Program (BAASP) to assist franchisees in streamlining the development of their Restaurants. Once Bonchon has approved the site for the Restaurant Location, Bonchon will determine the franchisee's eligibility to participate in BAASP based on the overall project timeline for the construction of the Restaurant and probability that the lease for the Restaurant Location will be executed. If the site qualifies for BAASP, Bonchon will notify the franchisee of their eligibility.