BR Korea, which operates Dunkin and Baskin Robbins, was sanctioned by the Korea Fair Trade Commission after it was caught running promotional events without properly obtaining franchisees' prior consent.
The Korea Fair Trade Commission (FTC) said on Feb. 1 that it issued a corrective order and imposed a 318 million won penalty surcharge on BR Korea, saying the company violated the consent requirements set by law when it held promotional events that created expense burdens for franchisees.
An investigation found that BR Korea, while running Dunkin discount events in partnership with credit card companies and mobile carriers in 2023 and 2024, failed to obtain prior consent on expense sharing from at least 70% of all franchisees.
In particular, in a Baskin Robbins promotion held with a mobile carrier in 2024, one nonconsenting franchise was treated as consenting, and it was also confirmed that the consent results were manipulated to appear as if 70% of all franchisees agreed.
Under the Fair Transactions in Franchise Business Act, if a franchisor intends to impose part or all of the promotional event expenses on franchisees, it must obtain prior consent from at least 70% of franchisees, and if imposing advertising expenses, from at least 50%. The Korea Fair Trade Commission (FTC) determined that BR Korea's conduct clearly violated these statutes and their enforcement decree.
Baskin Robbins became the first case to be fined a penalty surcharge for violating the prior-consent rule on promotions in the franchise sector since the system was introduced in July 2022.
The Korea Fair Trade Commission (FTC) said, "We plan to continue monitoring franchisors' unfair practices to protect franchisees' rights and interests and to take stern action if violations of the law are confirmed."