It was confirmed on the 19th that the Fair Trade Commission is conducting an on-site probe into alleged violations of the franchise business law by BR Korea, which operates Baskin-Robbins and Dunkin. BR Korea is an affiliate of SPC. The probe is said to be related to allegations raised at the National Assembly's audit last month that BR Korea induced approval by offering favorable treatment to franchisees who supported promotional events.
According to ChosunBiz's reporting, the Fair Trade Commission's Daejeon office recently began an on-site investigation into BR Korea. The on-site probe was still underway as of that day. Because BR Korea's headquarters is in Eumseong, North Chungcheong Province, the Daejeon office launched the investigation.
The probe began after franchisees reported the headquarters to the Fair Trade Commission on suspicion of violating the franchise business law. At the National Policy Committee's audit last month, allegations were raised that BR Korea pressured Baskin-Robbins and Dunkin franchisees to approve promotional events. Under the franchise business law, if a promotional event requires franchisees to shoulder part of the expense, approval from 70% of the owners is required.
At the time, Democratic Party of Korea lawmaker Lee Jeong-mun said, "The headquarters this year provided ice cream support benefits only to owners who agreed to the telecom partnership discount, and effectively disadvantaged those who opposed it by excluding them."
The Fair Trade Commission is also said to be examining whether SPC affiliate membership service "Happy Point" violated the law. Happy Point allows consumers to accumulate a portion of their payment amount and use it like cash. Lawmaker Lee Jeong-mun noted during the audit, "Even though owners bear half of the accrued points, there was no franchisee consent procedure when the system was introduced."
The Fair Trade Commission is also reportedly looking into whether Dunkin forced store environment upgrades by supplying popular donuts only to outlets with newly renovated interiors.
If the probe finds that BR Korea violated the law, the Fair Trade Commission is expected to impose corrective orders or sanctions such as a penalty surcharge. Regarding this, an official at the Fair Trade Commission said, "We cannot confirm whether an investigation is underway or provide details."