Upon expiration of the agreement between Bonchon and Pepsi-Cola, what happens to the fountain dispensers or other equipment components if Pepsi-Cola seeks to retain title?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon expiration of this Agreement, if Participating Franchisee has not entered into a further agreement with Pepsi-Cola for the purchase of Products, Participating Franchisee will immediately, to be received by Pepsi-Cola and Bottlers no later than thirty (30) days following expiration:
- (i) Make a payment to Pepsi-Cola reflecting reimbursement for all funding previously advanced by Pepsi-Cola or the Bottlers but not earned by the Participating Franchisee pursuant to the terms of this Agreement, if any; and
- (ii) Surrender to Pepsi-Cola any fountain dispensers or other components of Equipment for which Participating Franchisee is notified by Pepsi-Cola that it seeks to retain title, and make a payment to Pepsi-Cola reflecting reimbursement to Pepsi-Cola for the current unamortized book value of components of Equipment for which Pepsi-Cola elects not to retain title (as reasonably determined by Pepsi-Cola, applying generally accepted accounting principles using 10 year straight line depreciation methodology). Upon receipt of the foregoing amount from Participating Franchisee, Pepsi-Cola will transfer legal title to remaining on-premise components and/or units of Equipment to Participating Franchisee; and
- (iii) Surrender to individual Bottlers any and all units of Packaged Products Equipment provided by such Bottlers.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, upon the expiration of the agreement with Pepsi-Cola, if a Bonchon franchisee has not entered into a further agreement with Pepsi-Cola for the purchase of products, the franchisee must surrender to Pepsi-Cola any fountain dispensers or other components of equipment for which Pepsi-Cola notifies the franchisee that it seeks to retain title. This surrender must occur no later than thirty (30) days following the expiration of the agreement.
Additionally, the Bonchon franchisee must make a payment to Pepsi-Cola reflecting reimbursement for all funding previously advanced by Pepsi-Cola or its Bottlers but not earned by the franchisee, if any. The franchisee must also make a payment to Pepsi-Cola reflecting reimbursement to Pepsi-Cola for the current unamortized book value of components of equipment for which Pepsi-Cola elects not to retain title. Pepsi-Cola will determine this unamortized book value using generally accepted accounting principles and a 10-year straight-line depreciation methodology.
Upon receipt of the payment for the unamortized book value, Pepsi-Cola will transfer legal title to the remaining on-premise components and/or units of equipment to the Bonchon franchisee. The franchisee must also surrender to individual Bottlers any and all units of Packaged Products Equipment provided by such Bottlers.