Until when does Pepsi-Cola have exclusive negotiation rights with Bonchon regarding beverage supply agreements?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
As of the commencement of this Agreement until six (6) months prior to the expiration of the Term, Participating Franchisee hereby grants Pepsi-Cola exclusive negotiation rights with respect to extending the current Agreement or entering into a new agreement for the supply of beverage products to the Participating Franchisee and/or its Outlets upon expiration of the current Term. Thereafter, if the parties have not entered into a new agreement, the Participating Franchisee shall be free to enter into discussions/negotiations with third parties.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a Participating Franchisee grants Pepsi-Cola exclusive negotiation rights from the commencement of their agreement until six months prior to its expiration. This means that Bonchon franchisees must negotiate exclusively with Pepsi-Cola for beverage supply agreements during this period.
After this exclusive negotiation window closes (six months before the agreement's end), the franchisee is then free to discuss and negotiate with other beverage suppliers if a new agreement with Pepsi-Cola has not been reached. This provides the franchisee with the opportunity to explore alternative options and potentially secure more favorable terms.
This clause ensures Pepsi-Cola has the first opportunity to renew or extend their beverage supply agreement with Bonchon franchisees. However, it also allows franchisees the flexibility to consider other suppliers as the agreement nears its end, promoting a competitive environment and potentially better deals for the franchisee.