Under a Bonchon Area Development Agreement, what does Bonchon grant to the developer?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
If you and we sign an Area Development Agreement, we will grant you a "Development Territory" and you will promise to develop, own and operate franchised Bonchon Businesses within the Development Territory. You will not receive an exclusive Development Territory. You may face competition from outlets that we own at nontraditional locations, from other channels of distribution or competitive brands that we control. Your Development Territory will be set forth on Exhibit A to your Area Development Agreement. The Development Territory includes the Protected Territories granted under the Franchise Agreement for each Bonchon Business that you develop. Each "Protected Territory" is restricted to a geographic area within which you agree to establish and operate a Bonchon Restaurant under a Franchise Agreement. Except in high-density population centers, a Restaurant's Protected Territory consists of the area inside a circle whose center lies at the Bonchon Restaurant Location and whose radius extends outward from the circle's center. The Protected Territory for your Bonchon Business depends on your market area, including population density, drive times, and similar factors. There is no set minimum or maximum Protected Territory. However, we do not anticipate (as a general rule) that the radius will ever be greater than 3 miles from the Bonchon Business or, less than 0.25 miles. If your Bonchon Business will be a Remote Kitchen Restaurant, your Protected Territory will be no greater than a one-tenth (0.1) mile radius from the Bonchon Business. Your Restaurant's specific Protected Territory will be somewhere in that range depending on your specific market and circumstances. For Restaurants located in high-density population centers, your Protected Territory will be determined on a case-by-case basis. Your right to operate a franchised Bonchon Business developed under an Area Development Agreement will be limited to the Bonchon Business' Restaurant Location situated in the respective Protected Territory located in the Development Territory. 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. See the description of the Franchise Agreements above in this Item 12.
Source: Item 12 — TERRITORY (FDD pages 60–65)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, if you and Bonchon sign an Area Development Agreement, Bonchon will grant you a "Development Territory" where you promise to develop, own, and operate franchised Bonchon Businesses. It is important to note that this Development Territory is not exclusive, meaning you may face competition from outlets that Bonchon owns at nontraditional locations, from other distribution channels, or from competitive brands that Bonchon controls. The specific details of your Development Territory will be outlined in Exhibit A of your Area Development Agreement.
Within the Development Territory, each Bonchon Business you develop will have a "Protected Territory" defined by the Franchise Agreement. This Protected Territory is a geographic area where you agree to establish and operate your Bonchon Restaurant. Except in high-density population centers, a Restaurant's Protected Territory consists of the area inside a circle whose center lies at the Bonchon Restaurant Location and whose radius extends outward from the circle's center. The radius is typically no greater than 3 miles and no less than 0.25 miles, but for Remote Kitchen Restaurants, the radius is no greater than one-tenth (0.1) mile radius from the Bonchon Business. For Restaurants located in high-density population centers, your Protected Territory will be determined on a case-by-case basis.
Bonchon does not approve or disapprove of the site for your first Restaurant Location under the Area Development Agreement, they do this under, and pursuant to the terms and conditions set forth in, the unit Franchise Agreement and in accordance with their then-current standards imposed in connection with same. However, Bonchon does 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 their then-current standards imposed in connection with same. Your right to operate a franchised Bonchon Business developed under an Area Development Agreement will be limited to the Bonchon Business' Restaurant Location situated in the respective Protected Territory located in the Development Territory.