Bonchon
Bonchon offers Korean-style chicken franchises in various formats including dine-in, fast casual, delivery, carryout, and remote kitchen options. Known for its crispy chicken and unique flavors, Bonchon operates in the quick-service restaurant sector.
About Bonchon
Bonchon International Inc., operating under the name Bonchon Chicken, is an international fast food chain that specializes in Korean fried chicken. The company was founded in 2002 by Jinduk Seo in Busan, South Korea, and currently has its headquarters in Dallas, Texas. Bonchon is considered to be one of the biggest Asian restaurant chains by revenue in the United States. The chain is credited as the first Korean fried chicken brand to expand internationally, bringing a broader wave of Korean food chains to global markets.
Read more on Wikipedia → · Facts from Wikipedia (CC BY-SA)
Bonchon franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation ranges widely depending on the type of restaurant. For a Dine-In Restaurant, it is from $1,005,136 to $1,312,626; for a Fast Casual Restaurant, from $775,036 to $1,077,926; for a Delivery and Carryout Only Restaurant, from $591,436 to $837,376; and for a Remote Kitchen, from $262,782 to $434,772. This includes various costs such as deposits, licenses, and other charges [p.34], along with the initial inventory needed for training and opening day [p.34].
What is the initial franchise fee?
The initial franchise fee for opening a single Bonchon Business is $35,000, which must be paid in full on the date you sign the Franchise Agreement [p.12]. This fee is nonrefundable [p.368].
What are the ongoing royalty and advertising fees?
Ongoing royalties are earned based on a percentage of the franchisee's gross revenues. Similarly, advertising fees are also collected from franchisees as a percentage of their gross revenues and are recognized when franchisee sales occur and the fee is deemed collectible [p.369].
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is not specified in the provided excerpts. However, based on the information given [p.524], if the term of the franchise is at least 5 years, the franchisee would typically receive at least 6 months' advance notice before the franchisor's intent not to renew is communicated, and there are provisions for renewal of the franchise agreement in consecutive terms of 20 years each [p.67].
Can I sell or transfer my franchise, and what does that require?
You cannot sell or otherwise assign or transfer all or any interest in your franchise without the franchisor's prior written consent [p.149]. However, if the assignee is a member of your immediate family, the franchisor will not unreasonably withhold consent. The franchisor may impose conditions on granting consent, which could include requiring the new Operating Principal to attend and successfully complete an Initial Training Program or Partner Training Program at their expense [p.149].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the Area Development Agreement if the prospective franchisee fails to adhere to the Development Schedule [p.65]. Additionally, the franchisor can terminate a Franchise Agreement for good cause, which includes failure to comply with lawful provisions of the franchise agreement and not curing such failures after receiving written notice and a reasonable opportunity to cure [p.524]. This isn't specified in the excerpts for other specific grounds of termination.
What financial requirements — net worth and liquid capital — do I need to qualify?
The FDD does not specify exact net worth or liquid capital requirements for qualification. However, it outlines that the franchisor reserves the right to require certain financial metrics, including maintaining adequate reserves and working capital sufficient to fulfill obligations and cover risks and contingencies for at least three months [p.127]. This may include a minimum working capital reserve but does not provide specific numerical values.
Do I get an exclusive or protected territory?
You will receive a designated location (the "Restaurant Location") with a Protected Territory within which you must operate your Bonchon Restaurant. However, this is not an exclusive territory, and you may face competition from other Bonchon outlets, including those owned by the franchisor. The size of the Protected Territory varies based on market factors but generally ranges from 0.25 to 3 miles around the Restaurant Location. [p.61, p.100]
What training and ongoing support does the franchisor provide?
The franchisor provides an Initial Training Program for free at their Restaurant Support Center in Dallas, TX or a designated Bonchon Training Restaurant. This program lasts approximately 15 to 20 days. For those not managing day-to-day operations full-time, there is also a Partner Training Program available at no cost. Additional on-site training and assistance can be requested but are not guaranteed; fees may apply based on the duration and costs associated with providing such support [p.59]. The franchisor reserves the right to determine the curriculum and number of participants in their training programs, which they may deliver through various electronic means [p.114].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts. The provided information does not give the exact number of current or closed franchised outlets.
Does the franchisor share any financial performance or earnings information?
The franchisor, Bonchon Franchise LLC, does not make financial performance representations [p.86]. However, if you are purchasing an existing outlet, they may provide actual records of that outlet's performance [p.86]. Additionally, the franchisor can supplement the information provided in Item 19 under certain conditions, such as providing possible performance at a specific location or under particular circumstances [p.82].
What am I restricted to selling, and where must I buy supplies?
You are required to offer for sale all menu items and services specified by the franchisor, and only those items. You must purchase proprietary products such as Bonchon logoed packaging items, cooking utensils, sweet sugar, brushes, and proprietary sauces from designated sources. For non-proprietary supplies, you must buy them from suppliers designated in writing by the franchisor or ones approved by them; these designations can be modified at any time. [p.37, p.121]