"Promotions Without Franchisee Consent"... KFTC Fines Dunkin' and Baskin-Robbins Franchisor BR Korea About 300 Million Won

BR Korea, the franchisor of Dunkin' Donuts and Baskin-Robbins, has been sanctioned by the Korea Fair Trade Commission (KFTC) for running promotional events without obtaining consent from franchisees.
The KFTC announced on the 1st that it had issued a corrective order and imposed a fine of 318 million won on BR Korea for holding promotions funded by franchisees without securing their prior consent.
Under the Fair Transactions in Franchise Business Act, when a franchisor conducts a promotional event for which franchisees bear all or part of the costs, it must obtain prior consent from at least 70% of all franchisees.
However, investigations found that BR Korea proceeded with Dunkin' Donuts promotions such as the "Hyundai Card M Point Deduction Partnership Event (2023)" and the "SKT Ongoing Partnership Event (January–February 2024)" for all franchise stores, even though it had not met the required consent threshold.
For Baskin-Robbins, it was also revealed that, while pushing ahead with SKT and KT telecom partnership promotions in 2024, the company arbitrarily altered the recorded consent status of some franchisees when calculating the consent rate, and carried out the events even though the actual rate fell short of 70%.
An official at the KFTC stated, "We will continue to monitor unfair practices by franchisors that infringe on the rights and interests of franchisees, and will respond strictly whenever violations of the law are confirmed."
hippo@fnnews.com Kim Chan-mi Reporter