Under what circumstances, if any, will Bonchon refund the Area Development Fee?

According to Bonchon's 2025 Franchise Disclosure Document, the Area Development Fee is generally non-refundable. The Area Development Fee compensates Bonchon for administrative expenses and lost development opportunities due to the territorial rights granted to the developer. This fee is payable in full upon signing the Area Development Agreement.

The Area Development Fee consists of the Initial Franchise Fee for the first Bonchon restaurant plus a $10,000 deposit for each subsequent restaurant the developer is obligated to open. This deposit is credited towards the Initial Franchise Fee for each Bonchon Business as it is developed. A Bonchon Business is considered "developed" when the Franchise Agreement is signed and the restaurant commences operations.

Bonchon states that failure to meet the development schedule outlined in the Area Development Agreement constitutes a material breach of the agreement. If the developer fails to execute Franchise Agreements or commence operations by the specified dates, the agreement may be terminated. In the event of termination due to failure to meet development obligations, the developer loses the right to develop remaining Bonchon Businesses in the territory and forfeits the Area Development Fee attributable to those undeveloped businesses. Bonchon then has the right to operate or franchise Bonchon Businesses within the Development Territory without violating the agreement.

In summary, the Area Development Fee is non-refundable under any circumstance, and failure to adhere to the development schedule can result in the loss of development rights and the Area Development Fee associated with undeveloped locations.