Ju Biung-ghi Chairperson of the Korea Fair Trade Commission said on the 24th that the requirements for registered franchisee groups that can negotiate directly with headquarters are strict and that a revision will be prepared.
Chairperson Ju said at the National Policy Committee full meeting that day, "As we tried to focus on a few large franchises and prevent the indiscriminate proliferation of groups among small franchises, we agree that the proportion for the range of 30 to 300 franchise outlets has become excessive."
On the 3rd, the Korea Fair Trade Commission (FTC) preannounced legislation for a revision to the Enforcement Decree of the Fair Transactions in Franchise Business Act that would allow franchisee groups to negotiate all transaction terms with franchisors if 10% or at least 1,000 of all franchisees gather to form a group. At this time, the 10% must be at least 30 people, which means franchises with fewer than 30 outlets cannot form a registered group.
Chairperson Ju said, "This proposal is not final, and we plan to revise it after fully hearing opinions," adding, "We will refine the bill with full consideration of a win-win structure between franchisors and franchisees." Then added, "We will refine the bill with full consideration of a win-win structure between franchisors and franchisees."
Meanwhile, the franchise industry says the revision to the enforcement decree preannounced by the Korea Fair Trade Commission (FTC) would still place a heavy burden on headquarters. If a group is recognized as a registered group when only 10% of all franchisees join, registered groups could spring up indiscriminately. They also say it lacks representativeness to speak for all franchisees, which could disrupt headquarters' management.