How to Finance a Bonchon Franchise: Fees, Formats and Funding
By Anthony Cornella
A Bonchon franchise loan funds a Korean fried chicken restaurant built around a hand-battered, double-fried product and a menu of signature sauces. Bonchon offers several restaurant formats, and the format you choose shapes how much you borrow and how lenders underwrite the deal.
US Professional Funding is not affiliated with, sponsored by or endorsed by Bonchon; the name is used only to describe the business. Figures from the franchisor’s disclosure document and franchising materials can change, loan programs and terms vary by lender and borrower, and every loan is subject to approval. Nothing here is legal, tax or investment advice. Review the current Franchise Disclosure Document (FDD) and franchise agreement with a qualified franchise attorney and accountant before you commit.
Bonchon Franchise Loan at a Glance
- Initial franchise fee: $35,000 per restaurant, according to Bonchon’s 2026 franchise brochure.
- Royalty: 5% continuing royalty fee.
- Ad fund: 1.5% continuing system ad fund fee, which the brochure says may increase up to 4%.
- Franchise term: 10 years.
- Total investment: varies with real estate, design and construction; the range appears in Item 7 of the FDD.
- Liquidity and net worth: tiered by development size, starting with the one-to-two-restaurant tier (details below).
- System size: more than 150 U.S. locations and nearly 500 restaurants worldwide in 8 countries, according to the company.
- Current FDD: the franchisor’s materials reference a disclosure document issued March 5, 2026.
- SBA Franchise Directory: listed, with a note about real estate collateral explained below.
What Is Bonchon?
Bonchon began in 2002 in Busan, South Korea, founded by Jinduk Seo. The name translates to “my hometown,” and the brand’s identity rests on Korean heritage and a signature chicken: each piece is hand-battered in a proprietary flour blend, double-fried for a thin, crunchy shell and hand-brushed with one of the brand’s sauces.
The brand grew across Asia and the United States, reaching its 150th U.S. store in 2025. The company reports more than 150 U.S. locations, a count that includes both franchised and corporate restaurants, and nearly 500 restaurants worldwide. The U.S. franchisor entity, Bonchon Franchise LLC, is based in Dallas, Texas.
Restaurant formats. Bonchon promotes flexible formats: full-service dine-in restaurants, fast casual units, remote kitchens and delivery and carryout-only locations. The format affects build-out cost, staffing and the sales assumptions a lender will accept.
Bonchon Franchise Costs
Bonchon’s franchising materials publish the franchise fee and ongoing fees, and state that the total investment varies with real estate, design and construction. The full estimate appears in Item 7 of the FDD, so a lender will ask for that table along with your own contractor and equipment quotes.
Initial franchise fee. The fee is $35,000 per restaurant. Bonchon says developers who commit to 3 or more restaurants can unlock a reduced franchise fee, subject to eligibility requirements. Check Item 5 for timing and any development fee structure.
Real estate, lease and build-out. Many restaurant owners lease their space. The cost to build depends heavily on the format and on whether the site is a raw shell or a second-generation restaurant with an existing hood, grease trap and walk-in cooler.
Kitchen equipment and fixtures. The double-fry process puts fryers, ventilation and fire suppression at the center of the kitchen. Add refrigeration, prep tables, sauce stations, dish equipment, point-of-sale and online ordering technology, and dining furniture for dine-in formats.
Opening costs and working capital. Opening inventory, pre-opening payroll and training, insurance, deposits, permits and grand-opening marketing all need funding before the first order. Item 7 includes an additional funds line for an initial period; lenders often like to see reserves beyond it.
Total investment. Bonchon states the total investment range in its FDD. Expect Item 7 to break that total into categories such as:
- Initial franchise fee
- Leasehold improvements and construction
- Architect, engineering and design fees
- Kitchen equipment, furniture and fixtures
- Signage and decor
- Technology and point-of-sale systems
- Opening inventory and supplies
- Training and travel
- Licenses, permits, insurance and deposits
- Grand-opening marketing
- Additional funds for the initial operating period
Ongoing Fees and How They Affect Your Loan
Royalty. Bonchon’s brochure lists a 5% continuing royalty fee. Item 6 defines how gross sales are calculated and when payments are due. Developers committing to 3 or more restaurants may receive a reduced royalty for the first 12 months after each opening, subject to eligibility.
Ad fund. The continuing system ad fund fee is 1.5%, and the brochure notes that it may increase up to 4%. Model the higher figure as a stress case.
Other fees. Expect technology, training, transfer and renewal fees and remodel obligations to appear in Item 6 and the franchise agreement.
How lenders factor fees into cash flow. Royalty and ad fund contributions come off gross sales before food, labor, rent and debt service. Lenders apply these percentages to your projected sales, add occupancy and payroll, and test whether the remaining cash flow covers the loan payment with a cushion in a slower first year.
Franchisor Requirements for New Owners
Bonchon sets financial minimums by development size. Its 2026 franchise brochure lists:
- Single unit or limited development (1 to 2 restaurants): minimum liquid capital of $250,000 to $400,000 and net worth of $750,000 to $1,500,000.
- Multi-unit development (3 to 5 restaurants): minimum liquid capital of $750,000 to $1,200,000 and net worth of $2,000,000 to $5,000,000.
- Large-scale development (5 or more restaurants): minimum liquid capital of $1,200,000 to $2,000,000 or more and net worth of $5,000,000 to $10,000,000 or more.
Bonchon’s candidate page lists a single-operator minimum of $500,000 in liquid assets and $1,000,000 in net worth, so confirm which threshold applies to your application. The franchisor also says it looks for franchisees with previous restaurant experience and a strong commitment to guest satisfaction.
The approval process. Candidates typically submit an application, receive and review the FDD, meet the franchise development team, complete the franchisor’s evaluation and, if approved, sign the franchise agreement and begin site selection.
Ways to Own a Bonchon
A new restaurant. Opening a new Bonchon means choosing a format, securing an approved site, negotiating a lease and building out the space. Financing rests on projections, the operator’s experience and the quality of the site. Our page on franchise start-up financing explains how lenders approach new units.
Buying an existing restaurant. A resale offers a built-out restaurant, trained staff and sales history. The buyer needs Bonchon’s approval, a lease assignment and, often, a review of any required upgrades. See our article on buying a franchise resale for the transfer steps.
Multi-unit development. Bonchon’s tiers are built for developers who commit to 3 or more restaurants, with fee and royalty incentives attached. Each restaurant is still financed when its site is ready, as discussed below.
Financing Options for a Bonchon Franchise
SBA 7(a) loans. Because Bonchon is on the SBA Franchise Directory, eligible buyers can use the SBA 7(a) loan program for build-out, equipment, the franchise fee, working capital or the purchase of an existing restaurant. The program maximum is currently $5 million.
SBA 504 loans. If you buy or build the building that houses your restaurant, an SBA 504 loan can finance owner-occupied real estate and long-lived fixed assets. This matters for owners who prefer to control a freestanding site rather than lease.
Conventional term loans. Borrowers with strong liquidity and restaurant experience, especially multi-unit developers, may qualify for a conventional business loan. Terms, collateral and covenants vary by lender.
Equipment financing. Fryers, hoods and fire suppression, refrigeration, prep equipment, dish machines, kiosks and point-of-sale hardware can be financed or leased separately, which can preserve cash for opening. See our restaurant equipment financing and leasing options.
Working capital and lines of credit. New restaurants need cash for inventory, payroll during training and the ramp-up period, and a buffer for chicken and cooking oil price swings. Game days and holidays can drive spikes in wing orders that require extra inventory and staff. Learn more about restaurant working capital.
Seller financing on resales. When buying an existing Bonchon, a seller may agree to carry part of the price. A seller note is typically subordinate to the senior loan, and loan programs may limit its terms or when it can be repaid.
SBA Loans for Bonchon Franchisees
The SBA Franchise Directory lists brands whose franchise documents have been reviewed for SBA eligibility. A listing is not an endorsement of the brand, and each borrower still has to qualify on credit, cash flow and collateral.
Bonchon’s directory listing. Bonchon is listed under code S0235, with a note containing two conditions. Both deal with real estate that secures an SBA-guaranteed loan:
- Lease rider: when the real estate where the franchise operates will secure the SBA-guaranteed loan, the franchisor’s lease rider may not be executed. A lease rider normally gives the franchisor certain rights in a franchisee’s lease; it is set aside where the property itself is loan collateral.
- Purchase option: the franchisor may not enforce a purchase option on real estate owned by the franchisee or an affiliate when that property is taken as collateral for the SBA loan. In plain terms, the lender’s interest in the property comes first.
For most owners who lease their space, the note has little day-to-day effect. If you or a related company will own the building and pledge it as collateral, your lender and attorney will make sure the documents follow these conditions.
SBA application tips. Tie your sources-and-uses statement to the Item 7 categories and your bids, document liquidity with recent statements, include your restaurant résumé and a signed or pending lease, and prepare monthly first-year projections with the royalty and ad fund fees built in. Our article on using the FDD in a franchise loan request covers which items lenders read first.
How Lenders Evaluate a Bonchon Deal
Personal credit and financial history. Lenders review personal credit reports, tax returns and a personal financial statement for each owner, and they look for a clean record of meeting obligations.
Net worth and liquidity. Lenders confirm that you meet Bonchon’s tier for your development commitment and that cash remains after the down payment for reserves and unexpected costs.
Industry and management experience. Bonchon looks for previous restaurant experience, and lenders do too. First-time owners without it can add a qualified general manager or operating partner with a stake in the business to strengthen a Bonchon franchise loan request.
Business plan and projections. A credible Bonchon plan models the chosen format, the dine-in, takeout and delivery sales mix, delivery commissions, labor for a made-to-order fry process, chicken and oil costs, local trade-area demographics and the 5% royalty and the ad fund percentage. The FDD includes Item 19 financial performance representations; review them with your accountant and build your own assumptions rather than relying on system averages.
The FDD and franchise agreement. Lenders review the 10-year term, renewal rights, transfer conditions, remodel requirements and default provisions, and they check that the documents line up with the SBA directory note when real estate is involved.
Site, lease or real estate. The lease term, including renewal options, should generally cover the loan term. Lenders look at rent relative to projected sales and use clauses that allow heavy frying. For a resale, expect to provide several years of the restaurant’s financial statements and tax returns.
The Kitchen and Build-Out Behind a Bonchon
The double-fry method puts fryer capacity, ventilation and safety at the center of the kitchen. Hoods, make-up air, fire suppression and grease management are among the most expensive and most heavily inspected parts of any restaurant build-out, and they often decide whether a second-generation space can be reused. Our guide to restaurant build-out financing explains how lenders fund construction in stages.
Multi-Unit Growth and Development Agreements
Development schedules. Bonchon groups developers into tiers: 1 to 2 restaurants, 3 to 5 restaurants and 5 or more. A development agreement commits the owner to opening a set number of restaurants on a schedule, and the financial minimums rise with each tier.
Financing a second or third restaurant. Each restaurant is usually financed when its site and lease are ready, and once the first one has operating history, its cash flow supports the next request. Combined SBA borrowing across affiliated businesses is subject to program limits, so larger groups often move toward conventional financing over time. Read more about multi-unit franchise financing.
Real-World Scenarios
A restaurant manager opening a first location. A longtime multi-unit restaurant manager meets Bonchon’s single-unit tier and signs a lease on a former restaurant space in a busy suburban center. An SBA 7(a) loan covers build-out, equipment and working capital, and the owner keeps part of her liquidity in reserve.
A resale buyer. A buyer acquires an existing dine-in Bonchon from a franchisee who is relocating. The lender underwrites historical sales and expenses, the remaining lease term and a planned refresh, and the seller carries a small subordinated note.
An owner who buys the building. A franchisee purchases a freestanding building for her second Bonchon and uses an SBA 504 loan for the real estate. Because the property secures the loan, the closing documents follow the SBA directory conditions on the lease rider and purchase option.
Common Mistakes to Avoid
- Choosing a format without modeling how it changes build-out, staffing and sales assumptions
- Building projections at the 1.5% ad fund rate without stress-testing the possible increase up to 4%
- Underestimating hood, fire suppression and grease management costs in a raw shell
- Leaving delivery commissions out of the margin on delivery orders
- Signing a development schedule without capital planned for each opening
- Spending all available liquidity on the first restaurant and keeping no reserves
For more pitfalls, read restaurant loan mistakes to avoid.
Next Steps to Finance Your Bonchon Franchise
Step 1: Confirm your tier. Decide how many restaurants you plan to develop and check your liquidity and net worth against Bonchon’s requirements for that tier.
Step 2: Review the FDD. Study Items 5, 6, 7, 10, 17 and 19 and the franchise agreement with a franchise attorney and accountant.
Step 3: Talk with a financing specialist early. Learn how lenders will view your experience and capital. Our SBA loan calculator can help with early payment estimates, which are for planning only and are not an offer or approval.
Step 4: Pick a format and site. Work with Bonchon on site approval and gather construction and equipment quotes for the format you choose.
Step 5: Build your plan. Prepare a business plan with monthly projections, a sources-and-uses statement and a ramp-up budget that includes every franchise fee.
Step 6: Apply, close and open. Submit your loan request with the lease or purchase contract, FDD, franchise agreement and personal financial documents, align closing with franchisor and landlord approvals, and keep reserves in place for the first months.
Bonchon Franchise Loan FAQs
How much does it cost to open a Bonchon?
Bonchon says the total investment varies with real estate, design and construction, and it publishes the range in Item 7 of the FDD. Your format and site condition drive the final number.
What is the Bonchon franchise fee?
The initial franchise fee is $35,000 per restaurant, according to Bonchon’s 2026 franchise brochure. Developers committing to 3 or more restaurants may qualify for a reduced fee.
What royalty and ad fund fees does Bonchon charge?
The brochure lists a 5% continuing royalty and a 1.5% system ad fund fee that may increase up to 4%. Item 6 of the FDD defines how these fees are calculated.
How much liquid capital and net worth do I need?
It depends on how many restaurants you commit to. For 1 to 2 restaurants, the 2026 brochure lists liquid capital of $250,000 to $400,000 and net worth of $750,000 to $1,500,000, while the candidate page lists $500,000 and $1,000,000 for a single operator. Requirements rise for 3 to 5 restaurants and again for 5 or more.
Can I get an SBA loan for a Bonchon franchise?
Yes, if you qualify. Bonchon is on the SBA Franchise Directory, with a note that applies when real estate secures the loan. SBA 7(a) and, for owner-occupied real estate, SBA 504 loans are both possible routes.
Can I buy an existing Bonchon?
Existing restaurants sometimes come up for sale. You will need franchisor approval and a lease assignment, and lenders will review the restaurant’s historical financials and any required upgrades.
Can I open multiple Bonchon restaurants?
Yes. Bonchon offers development tiers of 3 to 5 restaurants and 5 or more, with a reduced franchise fee and reduced royalty for the first 12 months after each opening, subject to eligibility.
Does Bonchon offer financing?
Check Item 10 of the current FDD to see whether the franchisor offers any direct or indirect financing. Most franchisees arrange financing through outside lenders.
How long is the Bonchon franchise term?
The franchise agreement term is 10 years, according to the brochure. Review Item 17 for renewal and transfer conditions.
Does the Bonchon FDD include financial performance information?
Yes. Bonchon’s materials state that its FDD includes Item 19 financial performance representations; individual results vary.
What documents do I need for a Bonchon franchise loan?
Expect to provide personal tax returns, a personal financial statement, bank and investment statements, a résumé, the FDD and franchise agreement, a lease or letter of intent, construction and equipment quotes and a business plan with projections.
Final Thoughts
A Bonchon franchise loan works best when the format, site, development commitment and capital plan all line up. Confirm the fees and the Item 7 range in the current FDD, plan for a fryer-centered kitchen build-out, model the ad fund at its possible higher rate and keep reserves after closing.
US Professional Funding helps franchise owners and buyers finance start-ups, acquisitions, equipment, working capital and refinancing for established brands. Explore our franchise financing and restaurant financing solutions.
