Bonchon franchise is a fast casual service restaurant that specializes in Korean-style fried chicken and a variety of savory Asian fusion dishes. It’s known for its signature fried chicken and prepared by using a double-frying method that was concocted by its founder Jinduk Seh. Formally known as Bonchon Restaurant Company, it was formed in Korea in November 2002 and incorporated in Korea in June 2009, when its name changed to Bonchon Inc.

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00:00 Introduction
00:36 Locations
00:44 CEO, Flynn Dekker
01:16 Korean Food Industry
01:54 Average Sales
02:05 Investment
02:28 Franchise Fee, Royalty & Advertising Fee
03:08 Conclusion

#BonchonFranchiseCostAndRevenueRevealed2022 #VettedBiz

Bonchon U.S.A., Inc. was organized in June 2011 and the principal business address is in Dallas Texas. The CEO is Flynn Dekker and has held this title since May 2019. Before Bonchon, Mr. Dekker served as the Chief Marketing Officer of Wingstop Inc. from 2014 to 2019 in Dallas, Texas.

Bonchon competes with popular fast-food chains like KFC, but Bonchon has a higher price point than KFC with average check around $31 a person but can include two people on the ticket. Bonchon appeals to families and friends who come together to enjoy the atmosphere and can also enjoy alcohol with their meal.

The initial license fee for a Bonchon franchise is $40,000. This is the upfront fee that must be paid when opening a Bonchon franchise. However, the more businesses you develop the cheaper the initial fee is for each business as outlined below.

1-2 Businesses: $40,000

3-5 Businesses: $35,000

6-10 Businesses: $30,000

11 or more Businesses: $25,000

If a Franchise Agreement is signed by you and Bonchon in 2021 and the associated Restaurant opens in 2021, then for that Restaurant we will reduce:

(i) the Initial Franchise Fee to $20,000

(ii) the Continuing Royalty rate to 2.0% for the first 12 months of operations and to 3.0% for the second 12 months of operations, after which the continuing Royalty rate will be 4.75%.

The estimated total investment necessary to begin operation of a Bonchon franchise ranges from $520,494 to $1,122,419 (excluding real property)

The total represented above excludes real property costs and the total investment necessary to begin operation as a franchisee under an Area Development Agreement is from $62,000 to $135,000 (assuming, for the low end of the range, you agree to develop 3 Businesses and, for the high end of the range, you agree to develop 10 Businesses, although this is not a maximum.

The royalty fee for Bonchon Franchise is 3.75% of previous week’s Gross Revenue for the first 12 months of operations then 4.75% after 12 months or for the rest of the initial term. There is also a system brand fund contribution: That is up to 4% of Gross Revenues but currently is 1% of gross revenues.

The table above contains financial performance information from “Mature Franchised Restaurants” aka franchised Bonchon Restaurants that were open and operating for a full twelve (12) month period during the 2019 and 2020 calendar years.

Although there were a total of 98 and 104 franchised Bonchon Restaurants operating in 2019 and 2020, respectively, 78 and 67 franchised Bonchon Restaurants qualified as Mature Franchised Restaurants during such reporting years and were included in the table.

In 2019 43% met or exceeded the 2019 yearly average Gross Revenues, with the highest Gross Revenues earned being $3,180,142 and the lowest Gross Revenues earned being $339,027.

In 2020 42% met or exceeded the 2020 yearly average Gross Revenues, with the highest Gross Revenues earned being $2,938,025 and the lowest Gross Revenues earned being $450,053.

Overall, Bonchon is a profitable business, with a net income of $1.74 million in 2020. The highest revenue stream is from franchise fees and royalties which accounts for over $6.2 million. Bonchon has seen a total revenue growth increase on average of 21% since 2018.

Expenses have risen as the company continues to add new franchises each year with expenses totaling 6.1 million in 2020.

Another promising sign is in 2020 members of the business invested $800,000 while only taking $380,000 in distributions from the bottom line.

In 2020, Bonchon net income was $1.74 million, but their cash and cash equivalents were almost $ 2.7 million at the end of 2020 which was about the same as the start of 2020.

Read here to learn more: https://www.vettedbiz.com/bonchon-franchise/

Want to speak with a franchise specialist about Bonchon or another franchise? Click here: https://share.hsforms.com/1ZtNM19w4R8WIXyNa_97N7w4e0xw

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