Under what conditions might Bonchon engage in pricing activities, such as setting maximum or minimum prices, in only certain geographic areas or with certain subsets of franchisees?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Because enhancing Bonchon's interbrand competitive position and consumer acceptance for Bonchon's products and services is a paramount goal of us and our franchisees, and because this objective is consistent with the long-term interest of the Bonchon System overall, we may exercise rights with respect to the pricing of products and services to the fullest extent permitted by thenapplicable law. These rights may include (without limitation) prescribing the maximum and/or minimum retail prices which you may charge customers for the products and/or services offered and sold at your franchised Restaurant; recommending retail prices; advertising specific retail prices for some or all products or services sold by your franchised Restaurant, which prices you will be compelled to observe; engaging in marketing, promotional and related campaigns which you must participate in and which may directly or indirectly impact your retail prices (such as "buy one, get one free"); and, otherwise mandating, directly or indirectly, the maximum and/or minimum retail prices which your franchised Restaurant may charge the public for the products and services it offers. We may engage in any such activity either periodically or throughout the term of this Agreement. Further, we may engage in such activity only in certain geographic areas (cities, states, regions) and not others, or with regard to certain subsets of franchisees and not others. You understand that any maximum, minimum or other prices we prescribe or suggest may or may not optimize the revenues or profitability of your franchised Business. However, subject to the terms and conditions of this Section 7.07, nothing in this Agreement may be construed to prevent you from otherwise freely establishing your own prices.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Bonchon may exercise rights regarding the pricing of products and services to enhance its competitive position and consumer acceptance. These rights can include prescribing maximum and/or minimum retail prices, recommending retail prices, advertising specific retail prices, and mandating participation in marketing and promotional campaigns that impact retail prices.
Bonchon has the option to engage in these pricing activities either periodically or throughout the term of the Franchise Agreement. Importantly, Bonchon may choose to implement these pricing strategies selectively, applying them only in specific geographic areas such as cities, states, or regions, or only with certain subsets of franchisees.
The FDD clarifies that any maximum, minimum, or other prices Bonchon suggests or prescribes may not necessarily optimize the revenues or profitability of a franchisee's business. However, franchisees retain the right to freely establish their own prices, subject to the terms outlined in Section 7.07 of the Franchise Agreement. This indicates that while Bonchon can influence pricing, franchisees have some autonomy in setting their own prices.