Hotseasoner, the operator of Dongdaemun Yupdduck, which forced franchisees to purchase POS terminals and kiosks, received a corrective order from the Korea Fair Trade Commission on the 8th.
According to the Korea Fair Trade Commission (FTC), Hotseasoner designated POS (point-of-sale) terminals as a mandatory purchase item for more than 12 years, from Apr. 11, 2013, to Aug. 25 last year. From Sept. 2, 2024, to Aug. 25 last year, kiosks and DID (digital information displays) were also included as mandatory items.
Hotseasoner required franchisees to buy only from the headquarters or vendors designated by the headquarters. It set contract clauses allowing supply restrictions, franchise termination, and penalty charges if products were procured from other vendors. However, the electronic devices in question turned out to be ordinary commercial goods that can be easily purchased on the market with similar performance.
Hotseasoner changed the three existing mandatory items from "required" to "recommended" for transaction counterparties after Aug. 26 last year, even though there were no special circumstances. It judged that there would be no problem linking POS systems and the like even if a franchise used other products.
The Korea Fair Trade Commission (FTC) determined that this conduct constituted unfair restriction of transaction counterparties (Article 12, Paragraph 1, Item 2 of the Fair Transactions in Franchise Business Act) and decided on a corrective order. An FTC official said, "With this measure, franchisees can now independently decide their suppliers for high-priced electronic equipment such as POS," adding, "By choosing lower-priced equipment, they are expected to reduce expenses."