Baskin-Robbins franchisees reported headquarters BR Korea to the Korea Fair Trade Commission, saying the company designated the "new (NEW) Pink Spoon" for ice cream as a mandatory item and forced them to buy it. They argue that after last year's amendment to the Franchise Business Act tightened requirements for designating mandatory items by franchisors, headquarters bundled even disposable consumables that can be sourced on the open market as mandatory items.
The issue is whether a franchisor can restrict even the purchase source of disposable spoons for the sake of brand uniformity. Franchisees argue the new Pink Spoon does not determine the taste or quality of the ice cream and costs more than twice as much as similar products on the market. BR Korea, on the other hand, says the new Pink Spoon is different from ordinary disposable spoons in material and design and is necessary for brand uniformity.
◇Franchisees say "there was no substantive consultation in the mandatory item designation process"
According to legal sources on the 8th, the Baskin-Robbins Franchisee Council reported BR Korea to the Korea Fair Trade Commission (FTC) in Feb. on suspicion of violating the Franchise Business Act. BR Korea, an SPC Group affiliate, operates the Baskin-Robbins and Dunkin franchises.
BR Korea filed a design for the new Pink Spoon in 2020 and registered the design right the following year. After that, as part of a brand renewal, it introduced the new Pink Spoon, which has a different shade from the existing pink spoon, and, according to the franchisee council, required its use at stores nationwide starting in Apr. 2022.
The dispute intensified after the amended Franchise Business Act took effect in Jul. 2024. The amendment requires franchisors to list in the franchise agreement items that must be purchased from designated suppliers to maintain brand identity. The intent is to prevent franchisors from forcing owners to buy items that do not necessarily need to be procured through headquarters.
In line with the amended law, BR Korea included the new Pink Spoon as a compulsory purchase item, that is, a mandatory item, in the franchise agreement. The franchisee side argues, "There was no substantive consultation on the need to designate it a mandatory item, the possibility of substitutes, or the basis for the price calculation in this process." The Franchise Business Act requires prior consultation if a franchisor changes transaction terms to the disadvantage of franchisees.
Franchisees do not consider the Pink Spoon a key item that determines the taste or quality of the ice cream. They say it is a disposable consumable that can be sufficiently substituted with market products as long as it meets certain material, size, and color standards.
Price is also a key issue. According to the complaint the franchisee council submitted to the Korea Fair Trade Commission (FTC), the price of the new Pink Spoon supplied by BR Korea is 38.5 won per piece. By contrast, similar products of the existing pink spoon that owners say they can source on the market cost 17.6 won per piece. The headquarters' supply price is more than twice as expensive as similar market products.
The franchisee council said, "Even though similar products can be procured externally, we are not guaranteed the right to choose the purchase source."
◇"Market products are sufficient" vs. "there is material and design differentiation"
The franchisee side argues there is no reason the new Pink Spoon must be used even from a brand image perspective. They say that when consumers think of Baskin-Robbins, the representative color they recognize is closer to that of the existing pink spoon, and the color of the new Pink Spoon is closer to an auxiliary color added during the brand renewal.
The franchisee council argued, "Brand distinctiveness is formed by the logo, trade name, store exterior, and the product itself, and it is hard to see it as being determined by the specific color of a simple eating utensil like a spoon."
Hyun Min-seok, an attorney at Law Firm YK representing the franchisee council, said, "Courts have found that items not directly related to taste and quality and easily obtainable on the market should not be subject to forced purchase through headquarters," adding, "We are considering a class action in addition to the report to the Korea Fair Trade Commission (FTC)."
BR Korea counters that the new Pink Spoon is different from ordinary disposable spoons on the market. A BR Korea official said, "The Pink Spoon differs in material, brand logo, and color," adding, "By blending a material with high elasticity, we reduced the risk of the spoon breaking or snapping in the mouth, and we also hold design rights for brand uniformity."
The official added, "The Pink Spoon is not a simple disposable spoon but an asset symbolizing the brand that has long been used in advertisements and various campaigns," and "In actual consumer feedback, there are cases where people associate the use of the genuine Pink Spoon with brand trust, or raise concerns about the hygiene and safety of self-purchased spoons."