In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Bonchon franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Bonchon franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Bonchon outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Bonchon franchise opportunity

Section V – Presentation and analysis of Bonchon’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2019, 2020, 2021, 2022, and 2023 average, median, highest, and lowest annual gross revenue for all franchised Bonchon Restaurants that were open for business in the United States during the entire respective 53-week fiscal year (that is, open from the beginning and through the end of the 2019, 2020, 2021, 2022, or 2023 fiscal year, as applicable)

Section VI – Key ratios, comparables, computations, and analyses for the Bonchon franchise opportunity (exclusive content for Platinum subscribers)

Section I – Bonchon Franchise Costs

• Initial Franchise Fee:  $35,000
• Pre-Opening Training Expenses:  $6,321 to $19,711
• Real Property:  $6,700 to $25,000
• Construction and Leasehold Improvements:  $412,500 to $590,000
• Equipment:  $125,000 to $193,000
• Furniture and Fixtures:  $45,283 to $66,658
• Smallwares and Small Appliances:  $23,500 to $25,000
• Uniforms:  $1,553 to $1,752
• Computer and Point-of-Sale System and Other Technology:  $20,000 to $32,000
• Inventory to Begin Operating:  $8,800 to $10,000
• Security Deposits, Utility Deposits, Business Licenses, and Other Prepaid Expenses:  $5,000 to $15,000
• Professional Fees:  $4,500 to $6,000
• Signs:  $8,200 to $15,003
• Architect and Engineering Fees:  $29,800 to $33,000
• Opening Advertising:  $5,000 to $10,000
• Pre-Opening Labor:  $9,615 to $20,415
• Additional Funds (initial period – 3 months):  $20,000 to $60,000
• Total Estimated Bonchon Franchise Costs (excluding real property):  $766,772 to $1,157,539

Section II – Bonchon’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Initial Franchise Fee:  $35,000

• Continuing Royalty:  5.0% of previous week’s Gross Revenues after first 12 months of operations and continuing throughout the remainder of the Initial Term

• System Brand Fund Contribution:  up to 4.0% of Gross Revenues (currently, it is 1.5% of Gross Revenues)

• Required Minimum Expenditure for Local Advertising:  per New Restaurant Marketing Plan, a minimum total of $5,000 over the course of the period beginning one month before scheduled opening and ending three months after opening; then on average: the greater of $1,166 per month or 1% of the preceding month’s Gross Revenues through the end of first full calendar year of operations and 2% of the previous year’s Gross Revenues for all subsequent years

• Advertising Cooperative:  when cooperative formed; minimum of 1% of Gross Revenues; maximum of 4% of Gross Revenues

Section III – Number of Franchised and Company-Owned Bonchon Outlets

Franchised

2021

• Outlets at the Start of the Year:  104
• Outlets at the End of the Year:  111
• Net Change:  +7

2022

• Outlets at the Start of the Year:  111
• Outlets at the End of the Year:  117
• Net Change:  +6

2023

• Outlets at the Start of the Year:  117
• Outlets at the End of the Year:  127
• Net Change:  +10

Company-Owned

2021

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  4
• Net Change:  +1

2022

• Outlets at the Start of the Year:  4
• Outlets at the End of the Year:  5
• Net Change:  +1

2023

• Outlets at the Start of the Year:  5
• Outlets at the End of the Year:  4
• Net Change:  -1

Section IV – News Updates on the Bonchon Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Bonchon Franchise (Item 19, 2024 FDD)

• Bonchon sets forth below certain historic financial performance information of franchised Bonchon Restaurants open and operating for a full 12-month period during the 2019, 2020, 2021, 2022, and 2023 calendar years (each a “Mature Franchised Restaurant”).

• Excluded from the “Mature Franchised Restaurant” definition and the financial performance representation set forth in the table immediately below are those franchised Bonchon Restaurants that operated for less than 12 months in the reported calendar year (whether as a result of the franchised Bonchon Restaurant (i) commencing operations in the midst of the reported calendar year, (ii) temporarily closing for a portion of the reported year for more than 14 consecutive days or operating less than 300 days (whether due to COVID-19 or otherwise), or (iii) permanently closing after the start of the reported calendar year).

• Specifically, excluded from this Item 19 are the results of:

• (i) for the 2019 fiscal year, (a) 17 franchised Restaurants that opened during the 2019 fiscal year, (b) 2 franchised Restaurants that closed during the 2019 fiscal year, and (c) 1 franchised Restaurant that temporarily closed for more than 14 consecutive days during the 2019 fiscal year;

• (ii) for the 2020 fiscal year, (a) 10 franchised Restaurants that opened during the 2020 fiscal year, (b) 4 franchised Restaurants that closed during the 2020 fiscal year, and (c) 23 franchised Restaurants that temporarily closed for more than 14 consecutive days during the 2020 fiscal year;

• (iii) for the 2021 fiscal year, (a) 9 franchised Restaurants that opened during the 2021 fiscal year, (b) 3 franchised Restaurants that closed during the 2021 fiscal year, and (c) 2 franchised Restaurants that temporarily closed for more than 14 consecutive days during the 2021 fiscal year; and

• (iv) for the 2022 fiscal year, (a) 11 franchised Restaurants that opened during the 2022 fiscal year, (b) 5 franchised Restaurants that closed during the 2022 fiscal year, and (c) 1 franchised Restaurant that temporarily closed for more than 14 consecutive days during the 2022 fiscal year, which therefore was not open for operation during the entire 2022 fiscal year; and

• (v) for the 2023 fiscal year, (a) franchised Restaurants that opened during the 2023 fiscal year, (b) franchised Restaurants that closed during the 2023 fiscal year, and (c) 1 franchised Restaurant that temporarily closed for more than 14 consecutive days during the 2023 fiscal year.

Annual 2019, 2020, 2021, 2022, and 2023 Data from Franchised Restaurants Based on 12 Months of Operations

• The table below presents the (i) actual, historical average, median, high/low annual Gross Revenues information during the 2019, 2020, 2021, 2022, and 2023 fiscal years for all franchised Bonchon Restaurants that were open for business in the United States during the entire respective 53-week fiscal year (that is, open from the beginning and through the end of the 2019, 2020, 2021, 2022, or 2023 fiscal year, as applicable), and (ii) the average Gross Revenue growth rate over the course of the 2019, 2020, 2021, 2022, and 2023 fiscal years.

• Although there were a total of 98, 104, 111, 122, and 126 franchised Bonchon Restaurants operating in 2019, 2020, 2021, 2022, and 2023 respectively, there were 78, 67, 100, 105, and 111 franchised Bonchon Restaurants that qualified as Mature Franchised Restaurants during such reporting years.

2019

• Number of Mature Franchised Restaurants:  78
• Average Gross Revenue:  $1,308,243
• Number and Percentage That Met or Exceeded Average:  33 / 42.3%
• Median Gross Revenue:  $1,192,143
• Highest Gross Revenue:  $3,180,143
• Lowest Gross Revenue:  $339,028

2020

• Number of Mature Franchised Restaurants:  67
• Average Gross Revenue:  $1,390,243
• Number and Percentage That Met or Exceeded Average:  28 / 41.8%
• Median Gross Revenue:  $1,269,802
• Highest Gross Revenue:  $2,938,025
• Lowest Gross Revenue:  $450,053

2021

• Number of Mature Franchised Restaurants:  100
• Average Gross Revenue:  $1,578,339
• Number and Percentage That Met or Exceeded Average:  42 / 42%
• Median Gross Revenue:  $1,467,220
• Highest Gross Revenue:  $3,250,608
• Lowest Gross Revenue:  $163,657

2022

• Number of Mature Franchised Restaurants:  105
• Average Gross Revenue:  $1,677,405
• Number and Percentage That Met or Exceeded Average:  45 / 43%
• Median Gross Revenue:  $1,595,756
• Highest Gross Revenue:  $3,785,506
• Lowest Gross Revenue:  $424,677

2023

• Number of Mature Franchised Restaurants:  111
• Average Gross Revenue:  $1,628,081
• Number and Percentage That Met or Exceeded Average:  47 / 42%
• Median Gross Revenue:  $1,478,140
• Highest Gross Revenue:  $4,011,620
• Lowest Gross Revenue:  $488,533

• Based on the foregoing table, the Average Gross Revenue growth rate from 2019 to 2023 is 5.6%.

• Gross Revenues were calculated in the same manner that you would calculate Gross Revenues for purposes of determining your Royalty. For the avoidance of doubt, “Gross Revenues” means all revenues and income from any source that was derived or received from, through, by or on account of the operation of the Restaurant business, whether received in cash, in services, in kind, from barter and/or exchange (valued at the full retail value of the goods or services received), on credit (whether or not ultimately payment on credit transactions is ultimately received), or otherwise.

• The following costs have been deducted from Gross Revenues: documented refunds, chargebacks, credits, and allowances that are given in good faith to customers; and, all sales taxes or similar taxes which are legally charged to customers (if such taxes were added to the taxes charged to the customers).

• This figure does not reflect either gross or net profit.

• The Gross Revenues information for Mature Franchised Restaurants were obtained from weekly royalty reports submitted by franchisees to Bonchon and information Bonchon polled from point-of-sale systems in the Restaurants. Bonchon has not independently audited that information.

• The Mature Franchised Restaurants that were open for operation during the entire 2019, 2020, 2021, 2022, and 2023 fiscal years (as applicable) and whose average Gross Revenues during the 2019, 2020, 2021, 2022, and 2023 fiscal year (as applicable) reported above are substantially similar to the Restaurant franchises Bonchon currently offers.

• This financial performance representation was prepared without an audit.

• Some Bonchon Restaurants have earned this amount. Your individual results may differ. There is no assurance that you’ll earn as much.

Section VI – Bonchon Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️