Under the Bonchon Area Franchise agreement, what is the minimum number of Bonchon Businesses an area franchisee must acquire and operate?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
We grant you, and you accept, the right to and obligation to acquire and operate no fewer than two Bonchon Businesses in the Development Territory and pursuant to the Development Schedule upon the terms and subject to the provisions of this Agreement (the "Area Development Business") and the terms of each Unit Franchise Agreement (referred to individually as a "Franchise Agreement" and collectively as the "Franchise Agreements") entered into between you and us, and all agreements related to the Franchise Agreements.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, an area developer is granted the right and obligation to acquire and operate no fewer than two Bonchon Businesses in the Development Territory. This obligation is subject to the terms outlined in the Area Development Agreement and each individual Unit Franchise Agreement.
This means a prospective Bonchon area franchisee commits to opening at least two locations within their designated territory. Failing to meet the development schedule outlined in the agreement can result in a breach of contract and termination of the agreement. However, termination of the Area Development Agreement does not automatically terminate any existing Franchise Agreements if the franchisee is in full compliance with those agreements.
Bonchon emphasizes the importance of adhering to the development schedule, stating that timely performance of obligations under the agreement is of the essence. This highlights the need for careful planning and execution on the franchisee's part to ensure they meet the required deadlines for opening new locations. Franchisees should carefully review the Development Schedule in Section 6.01 of the Area Development Agreement to fully understand their obligations and the potential consequences of failing to meet them.
Furthermore, the franchisee cannot develop or operate more than the agreed-upon number of Bonchon Businesses without Bonchon's prior written consent. A Bonchon Business is considered "developed" once the Franchise Agreement is signed and the business has commenced operations.