From now on, franchise headquarters that operate franchises must record quarterly changes in the number of franchise stores and company-owned stores in the disclosure document available to prospective entrepreneurs who want to open a franchise. Until now, franchise headquarters have revised this once a year, but the Franchise Business Act will be amended to provide would-be franchisees with up-to-date information in a timely manner.
The Korea Fair Trade Commission said the Enforcement Decree of the Fair Transactions in Franchise Business Act, which includes these measures, passed the Cabinet meeting on the 28th. Together with the notice on the standard form of the franchise transaction disclosure document to be promulgated on Aug. 4, it will go into full effect starting next year.
The Korea Fair Trade Commission (FTC) will also revise the notice on the standard form of the franchise transaction disclosure document to reflect the changes to the enforcement decree. First, it will reorganize the disclosure document's table of contents in the order of a franchise store's life cycle (opening–operation–closure). It also newly added a summary that includes information affecting start-up decisions, such as the number of franchise stores by region and average annual sales.
The upper limit for aggravating penalty surcharges imposed on franchise headquarters that repeatedly violate the law will also be raised. The amendment includes raising the Korea Fair Trade Commission (FTC)'s cap on adjusting imposed penalty surcharges from 50% to 100%.