Under what circumstances will a Bonchon cobranding program NOT increase a franchisee's Continuing Royalty, System Brand Fund Contribution, or local advertising expenditure obligations?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
We may determine from time to time to incorporate in the Bonchon System products or services which we either develop or otherwise obtain rights to, which are offered and sold under names, trademarks and/or service marks other than the Proprietary Marks and which your Bonchon Business, along with other Bonchon Businesses, will be required to offer and sell. This activity, referred to as "cobranding", may involve changes to the Proprietary Marks and may require you to make modifications to your Restaurant's building and premises and the furniture, fixtures, equipment, signs and trade dress of your Restaurant. If you receive written notice that we are instituting a cobranding program, you agree promptly to implement that program at your Bonchon Restaurant at the earliest commercially reasonable time and to execute any and all instruments required to do so. Under no circumstance will any cobranding program increase your Continuing Royalty, System Brand Fund Contribution or local advertising expenditure obligations under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Bonchon may introduce cobranding programs that incorporate products or services from other brands into the Bonchon system. These programs may require franchisees to offer and sell these cobranded items, potentially necessitating modifications to the restaurant's building, premises, furniture, fixtures, equipment, signs, and trade dress.
However, the FDD explicitly states that under no circumstance will these cobranding programs increase a franchisee's financial obligations regarding Continuing Royalty, System Brand Fund Contribution, or local advertising expenditure. This means that even if a franchisee is required to participate in a cobranding initiative, their existing financial obligations to Bonchon in these three areas will remain unchanged.
This provision protects franchisees from unexpected cost increases due to the implementation of cobranding programs. While franchisees may need to invest in physical modifications to their restaurants to accommodate the cobranded products or services, their ongoing royalty, brand fund, and local advertising commitments will not be affected. This provides a level of financial predictability and security for franchisees as Bonchon explores new cobranding opportunities.