The Korea Fair Trade Commission imposed a penalty surcharge of 197 million won on BSB Food, which operates the pizza franchise "Cheongnyeon Pizza," for alleged violations of the franchise business act. It also ordered measures to prevent recurrence of noncompliance with statutory requirements and to revise contract clauses.
According to the Korea Fair Trade Commission (FTC) on the 5th, BSB Food signed franchise contracts with franchisees from Mar. 2021 to Jan. 2025 that included a special clause for "0 won delivery fee" on all delivery orders. It notified franchisees that those who did not follow this and charged delivery fees could face disadvantages such as contract termination or refusal of renewal.
The Korea Fair Trade Commission (FTC) saw no justifiable reason for setting the "0 won delivery fee special clause." It is not a general transaction practice to charge consumers a certain amount for delivery, and orders did not increase noticeably to lift franchisees' revenue.
The Korea Fair Trade Commission (FTC) also viewed the amount of penalties BSB Food collected from franchisees as excessive. From July 2021 to Nov. 2024, BSB Food imposed 1.11 billion won in penalties on franchisees who personally procured items that were mandatory purchases from headquarters. The franchisees' acts were at the level of 5,100–114,000 won per case, but BSB Food imposed penalties of 3 million–20 million won.
For the two acts, the Korea Fair Trade Commission (FTC) applied alleged violations of Article 12, Paragraph 1, Subparagraphs 3 and 5 of the franchise business act, which prohibit determining the prices of franchisees' goods and services without justifiable reason and imposing unfair liability for damages.
An official at the Korea Fair Trade Commission (FTC) said, "This action proves that the '0 won delivery fee' special clause was an unfair practice that caused a decline in franchisees' operating profit," adding, "It also makes clear that setting penalty amounts excessively without specific consideration of the degree of breach of contract constitutes a violation."