Under what circumstances does Pepsi-Cola/PepsiCo have the right to withhold payments due to a Bonchon franchisee?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPTS]
7.6. Right of Offset
Pepsi-Cola/PepsiCo has and reserves the right to withhold payments due hereunder as an offset against:
- (i) amounts not paid by Participating Franchisee for Postmix Products [and any PepsiCo products, if any] purchased from Pepsi-Cola/PepsiCo hereunder; and
- (ii) amounts not paid by Participating Franchisee for Packaged Products purchased from Bottler(s) hereunder;
- (iii) any and all balances due and payable to Pepsi-Cola/PepsiCo and Bottlers hereunder; and
- (iv) any and all balances due and payable under any separate services agreement between Participating Franchisee and Pepsi-Cola and/or its subsidiaries and affiliates.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Pepsi-Cola/PepsiCo reserves the right to withhold payments that are due to a Bonchon franchisee under specific circumstances. This right of offset allows Pepsi-Cola/PepsiCo to deduct amounts from payments owed to the franchisee to cover outstanding debts.
Specifically, Pepsi-Cola/PepsiCo can withhold payments to offset amounts not paid by the Bonchon franchisee for Postmix Products and any PepsiCo products purchased from them. This also applies to amounts not paid for Packaged Products purchased from Bottlers. Furthermore, Pepsi-Cola/PepsiCo can withhold payments to cover any and all outstanding balances owed to Pepsi-Cola/PepsiCo and Bottlers. This includes balances due under any separate service agreements between the Bonchon franchisee and Pepsi-Cola and/or its subsidiaries and affiliates.
This provision in the agreement between Bonchon franchisees and Pepsi-Cola/PepsiCo is a standard business practice to ensure that all outstanding debts and obligations are met. It protects Pepsi-Cola/PepsiCo and its Bottlers from financial losses due to non-payment by the franchisee. For a prospective Bonchon franchisee, this means they must maintain good financial standing with Pepsi-Cola/PepsiCo and its Bottlers to avoid any disruption in payments they might be expecting.