Under what conditions can a Bonchon franchisee develop or commence operations of more Bonchon Businesses than the total number set forth in the Development Schedule?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
You may not develop or commence operations of more than the total number of Bonchon Businesses set forth above without first obtaining our written consent.
A Bonchon Business will be considered "developed" if: (a) the Franchise Agreement for the Bonchon Business has been signed by you and us, and (b) the Bonchon Business has commenced operations in accordance with the Franchise Agreement governing the Bonchon Business.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a franchisee may not develop or commence operations of more Bonchon businesses than the total number outlined in their Development Schedule without first obtaining written consent from Bonchon. A Bonchon Business is considered "developed" when the Franchise Agreement has been signed by both the franchisee and Bonchon, and the business has commenced operations in accordance with the Franchise Agreement.
This requirement ensures that Bonchon maintains control over the pace of expansion and can assess the franchisee's capabilities and market conditions before allowing further development. For a prospective franchisee, this means that adhering to the Development Schedule is crucial, and any desire to accelerate development requires proactive communication and approval from Bonchon.
Failure to meet the Development Schedule can result in a material breach of the Area Development Agreement, potentially leading to termination of the agreement and loss of rights to develop further Bonchon Businesses in the Development Territory. Bonchon may then operate or franchise Bonchon Businesses within the Development Territory without violating the agreement. However, termination of the Area Development Agreement will not impact any existing Franchise Agreements under which the franchisee has already commenced operations, provided the franchisee is in full compliance with those agreements.
This provision highlights the importance of careful planning and execution in meeting development obligations. Franchisees should discuss their development capacity and market opportunities thoroughly with Bonchon during the initial agreement to ensure a realistic and mutually beneficial Development Schedule. Additionally, maintaining open communication with Bonchon regarding any potential changes or opportunities is essential for obtaining the necessary consent to expand beyond the initial schedule.